Sales revenue: It is the overall income that is earned during the selling of goods and services after deducting returns. It is also referred to as Net sales revenue.
Revenue recognition: GAAP (Generally accepted accounting principles) states that under specific conditions only the revenue is recognized and accounted for.
Performance obligation: Performance obligation means a promise to transfer goods or services. A contract can have one or many obligations.
Franchise: It is the right to sell a company’s product with the specified terms and condition in a particular area.
Franchisee: It is an organization or a sole proprietor that holds a franchise for the sale of goods and services in operations.
Franchisor: It is an organization or a sole proprietor that provides a franchise for the sale of goods and services in operations.
Franchise fees: It is an amount which is paid by the franchisee to the franchisor for the life of franchise agreement.
(a)
To discuss: To discuss the alternatives to account for the franchise fees.
Given information: All the related information is provided in the question document.
(b)
To prepare: To prepare the
Given information: All the related information is provided in the question document.
(c)
To determine the accounting for unearned franchise fees, assuming that A has little or no involvement with the franchisee related to expert advice on employee and management training, quality control, and promotion, once the franchise opens.
Given information: All the related information is provided in the question document.
Want to see the full answer?
Check out a sample textbook solution
Chapter 18 Solutions
Intermediate Accounting, Binder Ready Version
- i need this question answer General accountingarrow_forwardnonearrow_forwardOn January 1, Jack Corp.'s Work-in-Process Inventory account had a balance of $29,600. During the year, $62,400 of direct materials was placed into production. Manufacturing wages incurred amounted to $88,500, of which $66,000 were for direct labor. Manufacturing overhead is allocated on the basis of 125% of direct labor cost. Actual manufacturing overhead was $92,800. Jobs costing $230,700 were completed during the year. What is the December 31 balance of Work-in-Process Inventory?arrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education