1. How much is the Franchise Revenue to be recognized in 2021? 2. How much is the Revenue to be recognized in 2022?
Q: Journalize the following transaction: Mar. 1 Received a 60-day, note for $24, 000 dated…
A: A journal entry is the act of recording any transaction, whether one that is commercial or not. An…
Q: All the following are characteristic of relevant costs except: Multiple Choice They are…
A: Relevant costs are those which needs to be taken into account for the change in production cost.…
Q: __________ considers the impact of changing one or more inputs or assumptions on the resulting…
A: Capital budgeting is one of the important process of financial management. By this procedure,…
Q: The following balances were extracted from the books of TopWatch Sdn Bhd for the year ended 31…
A: Financial Statement - Financial statements are written documents that detail the financial…
Q: Before Khalish completes the audit, critically analyse Bright Bhd.'s financial statements from…
A: An auditor when performs the audit on the financial statements of the company have to give or in…
Q: Is there more to the Adjusting Entries for Aunt Ibby's Styling Salon?
A: Question contains four sub parts, in which adjusting entries and closing entries are required in…
Q: Calculate earnings per share. Earnings per share = $Answer b) Calculate the dividend yield.…
A: Earning per share :— It is the value of earnings available to equity shareholders per number of…
Q: Waterway Industries has 11000 units in beginning finished goods. The sales budget shows expected…
A: Budgeting is a process of estimation of future plan about income and expenses. This able an…
Q: a) Given that Weber Inc. employs a perpetual inventory system, calculate the cost of goods available…
A: Inventory refers to all the items of goods, and materials held by a business for selling in the…
Q: Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVS), the…
A: Contribution margin is the amount an entity has, after deducting variable expenses from sales. The…
Q: Asset 3 Date PLANT ASSET RECORD No. Description Filing Cabinet Bought_January 3, 2001 Date Estimated…
A: The formula for Annual Depreciation Expense using the Straight-line depreciation method: Annual…
Q: 1. Determine the net present value of alternative 1. 2. Determine the net present value of…
A: Given in the question: Required Rate of Return on Investment 12% Alternative 1 Initial…
Q: Swifty has a standard of 1.2 pounds of materials per unit, at $4 per pound. In producing 3000 units,…
A: Materials Variance :— Variance analysis direct material price variance is the difference between the…
Q: Required: 1. Calculate depreciation for each year of the asset's eight-year life. 2. Are changes in…
A: Sometimes Business Entities change the method of depreciation. This could be due to change in…
Q: Waupaca Company establishes a $350 petty cash fund on September 9. On September 30, the fund shows…
A: Introduction: A journal entry is used to record a business deal in a company's financial records. A…
Q: What is the depreciation deduction, using 200% DB method, after year 2 for an asset that costs…
A: The full form of DDB is Double declining balance method. The DDB method is a depreciation method. In…
Q: Discuss why in many liability firms, the managers do not receive a fixed payment for their work, but…
A: Fixed payment An installment loan with a fixed-rate payment has an interest rate that won't…
Q: Costs estimations and cost predictions are two terms often used as management accountant that must…
A: under the accounting process management decide to do estimation of the cost which will tell that how…
Q: Use the following to describe the order of the steps in the Accounting Cycle. Prompts Submitted…
A: Answer:- Accounting cycle meaning:- Accounting cycle is basically a process which is designed to…
Q: Swifty has a standard of 1.2 pounds of materials per unit, at $4 per pound. In producing 3000 units,…
A: Total Materials Variance: Difference between the Standard material costs and the actual material…
Q: What does the rule of 72 show as an approximate number of years? Selected answer will be…
A: Compounding is the process in which interest is credited on the principal amount as well as the…
Q: The accounting records of Friends Company provided the data below: Net income Depreciation expense…
A: Cash Flow From Operating Activities :— Cash flow from operating activities does not include long…
Q: Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards…
A: Present worth of this investment :— It is the sum of all present value of future cash flows. It is…
Q: Waterway Industries uses flexible budgets. At normal capacity of 26000 units, budgeted manufacturing…
A: Flexible budgets are budgets that can be changed on the basis of the number of units produced and…
Q: Bridgeport AG unda €175.000, 4-year 95% note at face value to Flint Hills Bank on January 1, 2022,…
A: A note payable can be described as a written commitment which is paid by promissory to the lender of…
Q: Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on…
A: Variable costs are those which may change with the change in the level of goods produced by an…
Q: Variable costing Marley Company has the following information for March: Sales $ 912,000…
A: Introduction: Variable costing is a managerial and cost accounting method that deducts fixed…
Q: Expenses are increased with: A. Debits because they decrease stockholders' equity B. Credits…
A: Expenses :— As per the accounting term is the money spent, or costs incurred, by a business in their…
Q: gross income MINUS adjustments to income EQUALS adjusted gross income adjusted gross income TABLE…
A: An itemized deduction seems to be one that is subtracted from your AGI in order to minimize your…
Q: The business sold this asset on December 27, 2015. The disposal amount received was $1,200. Complete…
A: Given in the question: It has been given that the asset which is oven has been sold by the business…
Q: Wall Co. leased office premises to Fox Co. for a 5 year, operating lease, beginning Jan. 1, 2022.…
A: Lease is one of the contract between two parties in which one party provides it's asset for use to…
Q: Please answer all three sunbparts
A: Formula Contribution Margin Ratio = Net Profit Ratio/Margin of Safety Ratio Variable Ratio = 1 -…
Q: Which of the following could be a logical or realistic accounting period For a business that is…
A: Financial statements are those which are prepared by an entity to know its profitability, financial…
Q: Explain what Real Property Gains Tax is in a Malaysian context and its basis of taxation.
A: Introduction: The term "taxation" refers to all types of unconscious levies, including income,…
Q: E. Sum of the Year's Digit Method Problem: A structure costs P120,000. It is estimated to have a…
A: The depreciation is charged on fixed assets as the reduction in the value of fixed assets with usage…
Q: During 2021, it costs Bramble, Inc. $24 per unit to produce part T5. During 2022, the unit cost has…
A: Make or Buy Decision :— It is act of selecting lowest cost alternative between making of product or…
Q: How much is the Continuing Franchise Fee Revenue to be recognized in 2021?
A: Given in the question: Royalty 5% Franchise Outlet opened May 1, 2021 Average…
Q: On January 1, 2021, Taco King leased retail space from Fogelman Properties. The 10-year finance…
A: Journal entries are those entries that include the daily transactions or events and are stated in…
Q: Which of the following is an election or calculation made by the partner rather than the…
A: Partnership is one of the forms of business organizations wherein two or more than two persons work…
Q: Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the…
A: Units produced in year 1 = Total units/useful life. = 399,000/10 =39900 units
Q: 1. For The period just ended, the gross margin of Robin Company was P 3,840,000, the cost of goods…
A: Direct labour refers to workers in manufacturing or services who are accountable for a specific…
Q: Heather will receive $13,000 at the end of every year for the next 15 years as a payment for a new…
A: PV analysis = Present value analysis help to find out the aggregate Cash Flow associated with…
Q: Total equity 145k at the beginning of the year, 210k in revenues 165k in expenses for the year.…
A: Since, Basic accounting equation is Total assets = Total liabilities + Total equity
Q: Bill and Brittany's father, Stuart, died in January 2021. Under Stuart's will, Stuart gave Bill his…
A: When assets are sold within 2 years from the date of acquisition, it is termed as short term capital…
Q: Dorsey Company manufactures three products from a common input in a joint processing operation.…
A: Products can either be sold at split off point or can be processed further and then sold after…
Q: A mail order business will generate cash flows of $9,000 at the end of each of the next 3 years,…
A:
Q: View Policies Current Attempt in Progress Culver Company is preparing its direct labor budget for…
A: Introduction: The direct labor budget is used to calculate the number of work hours needed to…
Q: The following events are to be considered upon finalizing the financial statements of Squid Bhd for…
A: According to the given question, we are required to explain the appropriate accounting treatment of…
Q: During 2021, your firm reported net income of $600 and paid a $120 cash dividend. The Dec 31, 2020…
A: Retained earnings Balance on December 31, 2021 = Retained Earnings Balance on December 31, 2020 +…
Q: Marigold Corp. produces a product requiring 4 direct labor hours at $15 per hour. During January,…
A: Labor Quantity Variance: The actual hours multiplied by the standard rate for labor are used to…
Accurate Company charges its new franchisees an initial franchise fee of P2,500,000. Of this amount, P1,000,000 is payable in cash when the agreement is signed, and the remainder is to be paid in three equal annual installments which are evidenced by 12% interest-bearing note. In consideration therefore, Accurate will assist in locating business site, conduct a market study to estimate earnings potential, supervise construction of a building, and provide initial training to employees. On December 1, 2021, Accurate entered into a franchising agreement with a franchisee. The franchise outlet was opened on January 15, 2022. Accurate had incurred a cost of P800,000 related to the franchise and it has ascertained that the collection of the note is reasonably assured.
1. How much is the Franchise Revenue to be recognized in 2021?
2. How much is the Revenue to be recognized in 2022?
Step by step
Solved in 4 steps
How much is the Unearned Revenue at December 31, 2021?
by Bartleby Expert
- SAPPHIRE CO. charges new franchisees an initial fee of P5,000,000. Of this amount, P2,000,000 is payable in cash when the agreement is signed, and the remainder is to be paid in three equal annual installments which are evidenced by an interest-bearing promissory note. In consideration therefore, SAPPHIRE CO. will assist in locating the business site, conduct a market study to estimate earnings potential, supervise construction of a building, and provide initial training to employees. On December 3, 2021, Sapphire Co. entered into a franchising agreement with EMERALD, INC. by the end of the year, SAPPHIRE CO. has completed about 25% of the initial services at a cost of P300,000 and it has ascertained that collection of the notes is reasonably assured. For 2021, SAPPHIRE CO. should recognized franchise revenue of:A. 5,000,000 C. 1,700,000B. 2,000,000Please answer in good accounting form. Thankyou SAPPHIRE CO. charges new franchisees an initial fee of P5,000,000. Of this amount, P2,000,000 is payable in cash when the agreement is signed, and the remainder is to be paid in three equal annual installments which are evidenced by an interest-bearing promissory note. In consideration therefore, SAPPHIRE CO. will assist in locating the business site, conduct a market study to estimate earnings potential, supervise construction of a building, and provide initial training to employees. On December 3, 2021, Sapphire Co. entered into a franchising agreement with EMERALD, INC. by the end of the year, SAPPHIRE CO. has completed about 25% of the initial services at a cost of P300,000 and it has ascertained that collection of the notes is reasonably assured. For 2021, SAPPHIRE CO. should recognized franchise revenue of:A. 5,000,000 C. 1,700,000B. 2,000,000Pacific Crossburgers Inc. charges an initial franchise fee of $70,000. Upon the signing of the agreement (which covers 3 years), a payment of $28,000 is due. Thereafter, three annual payments of $14,000 are required. The credit rating of the franchisee is such that it would have to pay interest at 10% to borrow money. The franchise agreement is signed on May 1, 2020, and the franchise commences operation on July 1, 2020. Instructions Prepare the journal entries in 2020 for the franchisor under the following assumptions. (Round to the nearest dollar.) a. No future services are required by the franchisor once the franchise starts operations. b. The franchisor has substantial services to perform, once the franchise begins operations, to maintain the value of the franchise. c. The total franchise fee includes training services (with a value of $2,400) for the period leading up to the franchise opening and for 2 months following opening.
- Pacific Crossburgers Inc. charges an initial fee of P70,000. Upon the signing of the agreement (which covers 3 years), a payment of P28,000 is due. Thereafter, three (3) annual payments of P14,000 are required. The credit rating of the franchisee is such that it would have to pay interest at 10% to borrow money. The franchise agreement signed on May 1, 20x5, and the franchise commences operation on July 1, 20x5. Assuming that the total franchise fee includes training services (with a value of P2,400) for the period leading up to the franchise opening and for two (2) months following opening.Pina Universe charges an initial franchise fee of $ 234,000. Upon the signing of the agreement, a payment of $ 26,000 is due. Thereafter, 5 annual payments of $ 41,600 are required. The credit rating of the franchisee is such that it would have to pay interest at 9% to borrow money. The franchise agreement is signed on August 1, 2020, and the franchise commences operation on October 1, 2020. Prepare the journal entries in 2020 for the franchisor under the following assumptions. a. No future services are required by the franchisee once the franchise starts operations. b. The franchisor has substantial services to perform, once the franchise begins operations, to maintain the value of the franchise. c. The total franchise fee includes training services (with a value of $ 6,900) for the period leading up to the franchise opening and for 2 months following openingOn January 1, 20x1, Marc Company enters into a contract with a customer to transfer a license. The initial franchise fee is P200,000, payable as follows: 20% cash down payment upon signing of the contract, and the balance is payable in four (4) equal annual installments starting December 31, 20X1. The appropriate discount rate is 10%. The contract also requires Marc Company to transfer equipment to the customer. The equipment has a cost of P30,000 and a stand-alone selling price of P50,000. The license has a stand-alone selling price of P38,000. Marc Company regularly sells the license and the equipment separately. The equipment is transferred to the customer on January 15, 20x1, while the license is transferred to the customer on February 1, 20x1. REQUIRED: Compute the following: 1. Total transaction price 2. Transaction price allocated to license 3. Transaction price allocated to equipment 4. Franchise fee revenue
- On January 1, 20x1, Marc Company enters into a contract with a customer to transfer a license. The initial franchise fee is P200,000, payable as follows: 20% cash down payment upon signing of the contract, and the balance is payable in four (4) equal annual installments starting December 31, 20X1. The appropriate discount rate is 10%. The contract also requires Marc Company to transfer equipment to the customer. The equipment has a cost of P30,000 and a stand-alone selling price of P50,000. The license has a stand-alone selling price of P38,000. Marc Company regularly sells the license and the equipment separately. The equipment is transferred to the customer on January 15, 20x1, while the license is transferred to the customer on February 1, 20x1. REQUIRED: Total transaction price Transaction price allocated to license Transaction price allocated to equipment Franchise fee revenueThe franchisor charges an initial franchise fee of P110,000 broken down as follows: Right to trade name, market, know-how P 50,000 Training services 20,000 Equipment (Cost of P10,800) 40,000 Total initial franchise fee P110,000 Upon signing of the agreement, a payment of P70,000 is due. Thereafter, two annual payments of P30,000 are required. The credit rating of the franchisee is such that it would have to pay interest of 8% to borrow money. The franchise agreement is signed on August 1, 2019, and the franchise commences operation on November 1, 2019. Assuming that no future services are required by the franchisor once the franchise begins operations, determine the net income reported on December 31, 2019. a. 99,200 b.125,180 c. 114,380 d. 112,600Kami, Inc. charges an initial franchise fee of P500,000 for the right to operate to operate as a franchise of Kami. Of this amount, P100,000 is payable when the agreement was signed and the balance is payable in a noninterest bearing note in five annual payments of P80,000 each. In return for the initial franchise fee, the franchisor will help locate the site, negotiate the lease or purchase of the site, supervise the construction activity, and provide the bookkeeping services. The credit rating of the franchisee indicates that money can be borrowed at 8%. The present value of an ordinary annuity of five annual receipts of P80,000 each discounted at 8% is P319,416.80. The discount represents the interest revenue to be accrued by the franchisor over the payment period. If the probability of refunding the initial franchise fee is extremely low, the amount of future services to be provided to the franchisee is minimal, collectability of the note is reasonably assured and substantial…
- The franchisor charges an initial franchise fee of P110,000 broken down as follows: Right to trade name, market, know-how P 50,000 Training services Equipment (Cost of P10,800) Total initial franchise fee 20,000 40,000 P110,000 Upon signing of the agreement, a payment of P70,000 is due. Thereafter, two annual payments of P30,000 are required. The credit rating of the franchisee is such that it would have to pay interest of 8% to borrow money. The franchise agreement is signed on August 1, 2019, and the franchise commences operation on November 1, 2019. Assuming that no future services are required by the franchisor once the franchise begins operations, the entry on August 1, 2019 would include:Flapper Jack's Pancake Restaurants Inc. sells franchises for an initial fee of $38,000 plus operating fees of $700 per month. The initial fee covers site selection, training, computer and accounting software, and on-site consulting and troubleshooting, as needed, over the first five years. On March 15, 2020, Tim Cruise signed a franchise contract, paying the standard $6,400 down with the balance due over five years with interest. Assuming that the initial services to be performed by Flapper Jack's subsequent to the signing are substantial and that collection of the receivable is reasonably assured, the journal entry required at signing would include a credit to: Multiple Choice O Deferred revenue for $38,000. Deferred revenue for $31,600. Franchise fee revenue for $38,000. Franchise fee revenue for $6,400.Frozen Delight, Inc. charges an initial franchise fee of $75,000 for the right to operate as a franchisee of Frozen Delight. Of this amount, $25,000 is collected immediately. The remainder is collected in four equal annual installments of $12,500 each. These installments have a present value of $41,402. As part of the total franchise fee, Frozen Delight also provides training (with a fair value of $2,000) to help franchisees get the store ready to open. The franchise agreement is signed on April 1, 2020, training is completed, and the store opens on July 1, 2020. Prepare the journal entries required by Frozen Delight on April 1 and July 1, 2020.
