What carrying amount of franchise at end of third year

Assignment Help Accounting Basics

Reference no: EM132703183

At the beginning of the current year, Tortelier Company signed an agreement to operate as a franchise of McBee Foods for an initial franchise fee of P32,000,000 for a period of 10 years. Of this amount P12,000,000 was paid when the agreement was signed and the balance payable in 5 annual payments of P4,000,000 at every year-end. The franchisee signed a noninterest-bearing note for the balance. The market rate of interest for this note is 10%. In return for the initial franchise fee, the franchisor will help in locating the site, negotiate the lease or purchase the site, supervise the construction activity and provide training to employees. The initial services required on the franchisor are substantially performed.

Problem 1: What is the carrying amount of the Franchise at the end of third year?

Problem 2: What is the interest expense in the second year?

Reference no: EM132703183

Questions Cloud

Doubtful accounts and lifo method of inventory : Allowance for doubtful accounts and LIFO method of inventory. Grace Gardner is the vice president of sales and marketing for Bermuda Pools and Spas,

What are your hobbies and interests : About Me: Tell us who you are. Where do you come from? Where do you live now? What are your hobbies and interests?

Calculate Teresa basis in the new plant : The plant has an adjusted basis of $270,000, and Teresa receives insurance proceeds of $410,000 for the loss. Calculate Teresa basis in the new plant

What is the carrying amount of the leasehold improvement : Alterations were made on the building at a cost of P2,000,000. What is the carrying amount of the leasehold improvement at the end of the year?

What carrying amount of franchise at end of third year : At the beginning of the current year, Tortelier Company signed an agreement, What is the carrying amount of the Franchise at the end of third year?

Develop synopsis of your outcomes for acquiring : Develop a synopsis of your outcomes for acquiring, developing, training, and leveraging on human capital within your organization.

Calculate Carey basis in the property received : The other party to the exchange assumes a mortgage loan on Carey's property of $50,000. Calculate Carey basis in the property received

Develop synopsis of your outcomes for acquiring : Develop a synopsis of your outcomes for acquiring, developing, training, and leveraging on human capital within your organization.

What amount in charged to loss on patent writeoff : In 2019, Feuermann Company spent P1,000,000 for the research and development. What amount in charged to Loss on patent writeoff in 2022?

User Account

All Pages