Problem 2 On January 2, 2022, SD Company signed an agreement to operate as a franchisee of TQ Products, inc. for an initial franchise fee of P937,500 for 7 years. Of this amount, P175,000 was paid when the agreement was signed and the balance payable in four annual payments beginning on December 31, 2022. SD signed a non-interest-bearing note for the balance. SD's rating indicates that he can borrow money at 16% for the loan of this type. Assume that substantial services amounting to P283,500 had already been rendered by TQ Products and that additional indirect franchise cost of P25,500 was also incurred. PV factor is 2.80. If the collection of the note is not reasonably assured, A. How much is the Realized Gross Profit for 2022? B. How much is the Receivable Balance as of December 31, 2022? C. How much is the net income for the year ended December 31, 2022

Problem 2 On January 2, 2022, SD Company signed an agreement to operate as a franchisee of TQ Products, inc. for an initial franchise fee of P937,500 for 7 years. Of this amount, P175,000 was paid when the agreement was signed and the balance payable in four annual payments beginning on December 31, 2022. SD signed a non-interest-bearing note for the balance. SD's rating indicates that he can borrow money at 16% for the loan of this type. Assume that substantial services amounting to P283,500 had already been rendered by TQ Products and that additional indirect franchise cost of P25,500 was also incurred. PV factor is 2.80. If the collection of the note is not reasonably assured, A. How much is the Realized Gross Profit for 2022? B. How much is the Receivable Balance as of December 31, 2022? C. How much is the net income for the year ended December 31, 2022

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(The following information applies to the questions displayed below.] On January 1, 2021, Eagle Company borrows $21,000 cash by signing a four-year, 5% installment note. The note requires four equal payments of $5,922, consisting of accrued interest and principal on December 31 of each year from 2021 through 2024. rt 2 of 2 Exercise 10-13 (Algo) Installment note entries LO C1 28 Prepare the journal entries for Eagle to record the note's issuance and each of the four payments. (Round your intermediate lnts calculations and final answers to the nearest dollar amount.) 8 ot56:49 View transaction list eBook Journal entry worksheet 2 4 Eagle borrows $21,000 cash by signing a four-year, 5% installment note. Record the issuance of the note on January 1, 2021. Note: Enter debits before credits. Mc Graw Hill Type here to search 69°F Cloudy 40 4. 6. T PI D. MI
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