What amount of revenue from training and franchise on april

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Reference no: EM132952800

Frozen Delight, Inc. charges an initial franchise fee of P75,000 for the right to operate as a franchisee of Frozen Delight. Of this amount P25,000 is collected immediately. The remainder is collected in four equal annual instalments of P12,500 each. These instalments have a present value of P41,402. As part of the total franchise fee, Frozen Delight also provides training (with a fair value of P2,000) to help franchisees get the store ready to open. The franchise agreement is signed of April 1, 20x5, training is completed, and the store opens on July 1, 20x5.

Problem 1. The amount of revenue from training and franchise on April 1, 20x5 to:

a. Zero. c. P66,402

b. P64,402 d. P75,000

Problem 2. The amount of revenue from training and franchise on July 1, 20x5 to:

a. Zero. c. P66,402

b. P64,402 d. P75,000

Reference no: EM132952800

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