oration entered into a 20 year franchise that allows ZZ Corporation the right to use its intellectual property. As part of the standard contract, ZZ gave P500,000 as down payment and a P2,000,000 note that requires equal annual payments over ten years. The down payment is for the supporting assets (equipment and inventory) with total dost of P300,000 and stand-along price
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- GHI Corporation entered into a 20 year franchise that allows ZZ Corporation the right to use its intellectual property. As part of the standard contract, ZZ gave P500,000 as down payment and a P2,000,000 note that requires equal annual payments over ten years. The down payment is for the supporting assets (equipment and inventory) with total dost of P300,000 and stand-along price of P500,000 to GHI. The prevailing market interest rate of similar notes is 9%. GHI is also to receive royalty of 3% of ZZ's revenue each year end. ZZ earned revenues of P10,000,000 during the first year. What is the Interest revenue for the first year?GHI Corporation entered into a 20 year franchise that allows ZZ Corporation the right to use its intellectual property. As part of the standard contract, ZZ gave P500,000 as down payment and a P2,000,000 note that requires equal annual payments over ten years. The down payment is for the supporting assets (equipment and inventory) with total dost of P300,000 and stand-along price of P500,000 to GHI. The prevailing market interest rate of similar notes is 9%. GHI is also to receive royalty of 3% of ZZ's revenue each year end. ZZ earned revenues of P10,000,000 during the first year. What is the Initial franchise revenue for the first year?Watts Inc. charges an initial franchise fee of P690,000, with P150,000 paid when the agreement is signed and the balance in five annual payments. The present value of the future payments, discounted at 10%, is P409,400. The franchisee has the option to purchase P90,000 of equipment for P70,000. Watts has substantially provided all initial services required and collectability of the payments is reasonably assured. The amount of revenue from franchise fees is?
- Kami, 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…Christina Co. has a factory equipment with a carrying amount of P700,000 and has a remaining useful life of 7 years. On January 1, 2020, Christina agreed to an exchange transaction with Kat & Inc. to transfer the equipment to the latter. The transfer satisfied the requirements of PFRS 15 to be a sale and Christina immediately leased it back for a lease term equal to the remaining life of the equipment. The sales price amounted to P500,000 while annual rental payable at the end of each year is P100,000 for an implicit rate of 10%. Selling price is equal to fair value. How much loss shall Christina recognize in relation to the sale and leaseback transaction? a. 681,578.63 b. 200,000 c. 194,736.75 d. 5,263.25Problem 2: GHI Corporation entered into a 20-year franchise that allows ZZ Corporation the right to use its se its intellectual property. As part of the standard contract, ZZ gave P500,000 as down payment and a P2,000,000 note that requires equal annual payments over ten years. The down payment is for the supporting assets (equipment and inventory) with total cost of P300,000 and stand-along price of P500,000 to GHI. The prevailing market interest rate of similar notes is 9%. GHI is also to BAGUIO CITY receive royalty of 3% of ZZ's revenue each year end. ZZ earned revenues of P10,000,000 during the first year. Required: OR 5. Revenue from sale of supporting assets 6. Initial franchise revenue for the first year 7. Continuing franchise revenue for the first year Interest revenue for the first year 8.
- ABC sells franchise arrangement throughout La Trinidad and Itogon. Under a franchise agreement, ABC receives 1,000,000 in exchange for satisfying the following separate performance obligations: franchisees have a ten year right to operate as an ABC retail establishment once it started its operation; franchisees receive an ABC building and necessary equipment; franchisees receive initial training and certification as an ABC retail. The 1,000,000 is payable with a down payment of P500,000 on August 1, 2021 with the balance will be payable in five equal annual payments with an interest of 10% starting January 1, 2022. The stand-alone selling price of the initial training and certification is P100,000 and P400,000 for the building and equipment. ABC estimates that the stand-alone selling price of the ten-year right to operate as a franchise using the residual approach. ABC received P500,000 on August 1, 2021 from DDD, which represent the collection from the training, building and…Mean Dones and Jeremie Jane Roldan Inc. charges an initial franchise fee of P920,00, with P200,000 paid when the agreement is signed and the balance in five annual payments. The present value of the future payments, discounted at 10%, is P545,872. The franchise has the option to purchase P120.000 of equipment for P96,000, franchise operations already stared. The amount of revenue from franchise fees is: a. P200.000b. P721.872 Atianzar and Cabalde Computers is a franchisor and provides a range of computing services hardware/software installation, repairs, dota backup, device syncing, and network solutions on popular Samsung, Dell, Acer and other PC devices. Each franchise agreement gives a franchisee theright to open a Atianzar and Cabalde outlet and sell Atianzar and Cabalde products and services in the area for five (5) years. Under the contract, Atianzar and Cabaldes also provides the franchisee with a number of services to support and enhance the franchise brand, including:•…ABC Company sells franchise arrangements throughout Luzon and Visayas. Under a franchise agreement, ABC receives P600,000 in exchange for satisfying the following separate performance obligations: • Franchisees have a five-year right to operate as an ABC's retail establishment in an exclusive sales territory • Franchisees receive initial training and certification, and • Franchisees receive an ABC building and necessary equipment. The stand-alone selling price of the initial training and certification is P15,000, and P450,000 for the building and equipment. ABC estimates the stand-alone selling price of the five-year right to operate as an ABC establishment using the residual approach. ABC received P75,000 on July 1, 2022, from a customer and accepted a note receivable for the rest of the franchise price. ABC will construct and equip the customer's building and train and certify the customer by September 1, and the customer's five-year right to operate as an ABC establishment will…
- On January 1, 20x1, Native Co. enters into a contract to grant a franchisee the right to use Native's trade name and sell Native's products for 10 years. In addition, Native also promises to provide the equipment necessary to operate the franchise store. The contract states a fixed consideration of P450,000 and a 5% sales-based royalty. The fixed consideration includes P150,000 payment for the equipment. This reflects the stand-alone selling price of the equipment. Native Co., as a franchisor, has developed customary business practice to undertake activities such as analyzing the customer's changing preferences and implementing product improvements, pricing strategies, marketing campaigns and operational efficiencies to support the franchise name. Native delivers the equipment to the customer on February 1, 20x1. The customer commences business operations on March 1, 20x1, at which date the 10-year license period starts to run. The franchisee reports sales of P1,200,000 for the year.…ABC sells franchise arrangement throughout La Trinidad and Itogon. Under a franchise agreement, ABC receives 1,000,000 in exchange for satisfying the following separate performance obligations: franchisees have a ten-year right to operate as an ABC retail establishment once it started its operation; franchisees receive an ABC building and necessary equipment; franchisees receive initial training and certification as an ABC retail. The 1,000,000 is payable with a down payment of P500,000 on August 1, 2021 with the balance will be payable in five equal annual payments with an interest of 10% starting January 1, 2022. The stand-alone selling price of the initial training and certification is P100,000 and P400,000 for the building and equipment. ABC estimates that the stand-alone selling price of the ten-year right to operate as a franchise using the residual approach. ABC received P500,000 on August 1, 2021 from DDD, which represent the collection from the training, building and…ABC sells franchise arrangement throughout La Trinidad and Itogon. Under a franchise agreement, ABC receives 1,000,000 in exchange for satisfying the following separate performance obligations: franchisees have a ten-year right to operate as an ABC retail establishment once it started its operation; franchisees receive an ABC building and necessary equipment; franchisees receive initial training and certification as an ABC retail. The 1,000,000 is payable with a down payment of P500,000 on August 1, 2021 with the balance will be payable in five equal annual payments with an interest of 10% starting January 1, 2022. The stand-alone selling price of the initial training and certification is P100,000 and P400,000 for the building and equipment. ABC estimates that the stand-alone selling price of the ten-year right to operate as a franchise using the residual approach. ABC received P500,000 on August 1, 2021 from DDD, which represent the collection from the training, building and…
