How much is the net income to be reported on July

Assignment Help Accounting Basics
Reference no: EM132974768

Problem - XYZ franchisor, entered into a franchise agreement with ABC, franchisee, on July 1, 20x7. The total franchise fee agreed upon is P550,000, of which P50,000 is payable upon signing and the balance is covered by a non-interest bearing note payable in four equal annual installments. It was agreed that the down payment is not refundable. The direct franchise cost incurred was P325,000. The management of ABC has estimated that they can borrow a loan of this type at the rate of 12%. The franchisee commenced its operations on July 31, 20x7. The contract provides that the franchisee has the right to use the entity's intellectual property as it exist at the point in time at which the franchise is granted.

Required -

1. How much is the net income (loss) to be reported on July 31, 20x7? (Use PV factor of 3.04)

2. Assuming the collection is not reasonably assured. The net income (loss) will be on July 31, 20x7?

Reference no: EM132974768

Questions Cloud

What is the value of each convertible bond : Each bond has a face value of $1,000 and a conversion ratio of 200. What is the value of each convertible bond at maturity
What the leased machine will be recorded : The present value of an annuity due of 1 for six years at 10% is 4.79079. What the leased machine will be recorded
Find the total standard cost of Fleck product : The standard rates are P3 per pound and P10 per hour. The standard overhead rate is P12 direct labor hour. Find the total standard cost of Fleck's product
Compute the issue price of each bond : The interest is payable each year on December 31. The bond was sold at an effective interest rate of 10%. Compute the issue price of each bond
How much is the net income to be reported on July : XYZ franchisor, entered into a franchise agreement with ABC, franchisee, on July 1, 20x7. How much is the net income to be reported on July
Create the journals to record all the transactions : January 27th -> Received payment from customer $7.500.000 for a project done. Create the journals to record all the transactions mentioned above
What is the correct amount of VAT payable : An electric cooperative provided the following data for the taxable year (net of applicable taxes): Sales P3,050,790. What is the correct amount of VAT payable
What is the standard work time to convey : It takes an expert 35 minutes to manage one 10-liter cluster of Cherifer. What is the standard work time to convey one 10-liter pack of Cherifer
How many pounds were initially invested : The annual interest rate in dollar deposit is 5% and the annual interest rate in pound deposit is 10%. How many pounds were initially invested

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd