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    Services, Training, Delivery Equipment Right To Trade Name

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    cram colasito
    1. The document identifies three performance obligations in a franchise agreement: the right to a trade name, training services, and equipment delivery. 2. It discusses accounting methods for notes receivable, stating that if collectability is reasonably certain, the accrual method is used to fully recognize revenue. 3. It provides journal entries for the initial franchise agreement, annual franchise revenue recognition, continuing franchise fees, and equipment delivery.

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    Services, Training, Delivery Equipment Right To Trade Name

    Uploaded by

    cram colasito
    34 views6 pages
    1. The document identifies three performance obligations in a franchise agreement: the right to a trade name, training services, and equipment delivery. 2. It discusses accounting methods for notes receivable, stating that if collectability is reasonably certain, the accrual method is used to fully recognize revenue. 3. It provides journal entries for the initial franchise agreement, annual franchise revenue recognition, continuing franchise fees, and equipment delivery.

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    ASTRANS

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    1. The document identifies three performance obligations in a franchise agreement: the right to a trade name, training services, and equipment delivery. 2. It discusses accounting methods for notes receivable, stating that if collectability is reasonably certain, the accrual method is used to fully recognize revenue. 3. It provides journal entries for the initial franchise agreement, annual franchise revenue recognition, continuing franchise fees, and equipment delivery.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    34 views6 pages

    Services, Training, Delivery Equipment Right To Trade Name

    Uploaded by

    cram colasito
    1. The document identifies three performance obligations in a franchise agreement: the right to a trade name, training services, and equipment delivery. 2. It discusses accounting methods for notes receivable, stating that if collectability is reasonably certain, the accrual method is used to fully recognize revenue. 3. It provides journal entries for the initial franchise agreement, annual franchise revenue recognition, continuing franchise fees, and equipment delivery.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 6

    Problem 1

    Identify the Performance Obligation


    * Right to Trade name
    * Services, Training, Delivery
    * Equipment

    Problem 2
    P 750,000
    The collectiility of the note is reasonably
    If the collectability of note is:
    *not reasonably certain- GP Method
    *uncertain- Cost Recovery Method

    Problem 3
    April 6,2020 Entered into Contract of Franchise
    Cash
    Notes Receivable
    Franchise Revenue

    At the time of reposession


    Fanchise Revenue
    Cash
    Interest Income
    Notes Receivable
    Gain on Repossession

    Problem 4
    April 06,2020 Entered Into a Franchise Contact
    Cash
    Franchise fee receivable
    Deferred Franchise Revenue

    Bargain Purchase was made Cash


    Franchise Revenue - Supplies

    Cost of Sales
    Supplies Inventory

    Franchise revenue
    Cash
    Interest income
    Franchise fee receivable
    Prepare Journal Entries

    DEBIT CREDIT
    Date of agreement
    Cash 200,000
    Franchise Receivable 1,300,000
    Unearned Franchise Fee - Rights 416,667
    Unearned Franchise Fee - Training 666,667
    Unearned Franchise Fee - Equipment 416,667

    Yearly Journal entries (5 years)


    Unearned Franchise Fee - Rights 83,333
    Unearned Franchise Fee - Training 133,333
    Franchise Revenue 216,667

    Cash 130,000
    Franchise Receivable 130,000

    Current Year End (CFF, 1% of 800,000)


    Cash 8,000
    Continuing Franchise Fee 8,000

    When the equipment was already delivered

    Unearned Franchise Fee-Equipment 416,667


    Franchise Rvenue 416,667

    The collectiility of the note is reasonably assured. If such note is, then we will use the accrual method in whic

    ontract of Franchise
    360,000
    140,000
    500,000

    reposession
    500,000
    300,000-7467 (Refund less accrued interest)
    292,533
    7,467 (140,000 x 8%) x 8/12 (April 06,2020-December 05, 2020
    140,000
    60,000

    Franchise Contact
    360,000
    140,000
    ranchise Revenue 500,000

    75,000
    COST X 125% (60,000 X 1.25)
    evenue - Supplies 75,000

    60,000
    60,000

    500,000
    352,533
    7,467
    e receivable 140,000
    Allocation of Transaction Price Stand alone Price

    Rights to trade name 500,000 500,000/1,800,000


    Training 800,000 800,000/1,800,000 x1,500,000
    Equipment 500,000 500,000/1,800,000
    1,800,000

    416,667/5 years
    666,667

    1,300,000/10 equal payments

    800,000 x 1%

    we will use the accrual method in which the amount is fully recognized.

    accrued interest)
    /12 (April 06,2020-December 05, 2020)
    1,500,000
    ALLOCATED PRICE
    416,667
    666,667
    416,667
    1,500,000

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