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Question - Philip's entered into a franchise agreement with Rusty. As per agreement on July 1, 2016, Rusty is to pay Philip an up-front franchise fee of 1,000,000 and subsequent annual franchise fees of 50,000 over the next four years. Cost of initial franchise services rendered by Philip's during the year is 250,000 which is substantial, and it estimates the cost of subsequent annual services to be 10,000. Rusty paid the annual franchises fee for 2017, and Philip's rendered the services for the year. In its December 31, 2017 income statement, find the amount of realized franchise fee revenue to be reported by Philip's?
a. 250,000
b. 25,000
c. 50,000
d. 300,000
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