Provide answer please!If the collection of the note receivable is reasonably assured, what is the net income to be recognized by the entity for the year ended December 31, 2020 in relation to the initial franchise fee?A. 98,850 C. 70,028B. 94,850 D. 92,037 On January 1, 2020, an entity granted a franchise agreement to a franchisee. The contract provides that thefranchisee shall pay an initial franchise fee of P500,000 and on-going payment of royalties equivalent to 8% ofthe sales of the franchisee.On January 1, 2020, the franchisee paid downpayment of P200,000 and issued a 3-year non-interest bearing notefor the balance payable in three equal annual installments starting December 31, 2020. The note has present valueof P240,183 with effective interest rate of 12%.As of June 30, 2020, the entity completed the performance obligation of the franchise at a cost of P352,146. Asidefrom that, the entity incurred indirect cost of P22,009.The franchisee started operation on July 1, 2020 and reported sales revenue amounting to P50,000 for theended December 31, 2020. The franchisee paid the first installment on its due date.year

Franchise Account The Purpose of providing the franchise business to allow to use the reputation of…

vable is reasonably assured, what is the net income to be recognized by the entity for the year ended December 31, 2020 in relation to the initial franchise fee? A. 98,850 C. 70,028 B. 94,850 D. 92,037

vable is reasonably assured, what is the net income to be recognized by the entity for the year ended December 31, 2020 in relation to the initial franchise fee? A. 98,850 C. 70,028 B. 94,850 D. 92,037

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...

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