QUESTION#1.Hot Pizza granted a franchise to Shake King. Shake King was to pay a franchise fee of P100,000 payable in five equal annual installments starting with the payment upon signing of the agreement. The franchisee was to pay monthly 1% of gross sales of the preceding month. Should the operation of the outlet prove to be unprofitable, the franchise may be cancelled with whatever obligation owing Hot Pizza, in connection with the P100,000 franchise fee, waived. The first year of operations generated a gross sale of P500,000. For the first year, Hot Pizza earned franchise fee of A.105,000 B.20,000 C.5,000 D.25,000
QUESTION#1.Hot Pizza granted a franchise to Shake King. Shake King was to pay a franchise fee of P100,000 payable in five equal annual installments starting with the payment upon signing of the agreement. The franchisee was to pay monthly 1% of gross sales of the preceding month. Should the operation of the outlet prove to be unprofitable, the franchise may be cancelled with whatever obligation owing Hot Pizza, in connection with the P100,000 franchise fee, waived. The first year of operations generated a gross sale of P500,000. For the first year, Hot Pizza earned franchise fee of A.105,000 B.20,000 C.5,000 D.25,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION#1.Hot Pizza granted a franchise to Shake King. Shake King was to pay a franchise fee of P100,000 payable in five equal annual installments starting with the payment upon signing of the agreement. The franchisee was to pay monthly 1% of gross sales of the preceding month. Should the operation of the outlet prove to be unprofitable, the franchise may be cancelled with whatever obligation owing Hot Pizza, in connection with the P100,000 franchise fee, waived. The first year of operations generated a gross sale of P500,000. For the first year, Hot Pizza earned franchise fee of
A.105,000
B.20,000
C.5,000
D.25,000
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