What is the carrying value of the franchise on december

Assignment Help Accounting Basics
Reference no: EM133122818

Question - On December 30, 2020, Boo Mull Leak Company obtained a franchise from Nana Tili Company to sell the latter's products for 20 years. The initial franchise fee as agreed upon shall be P10,000,000, payable in cash amounting to P1,000,000 when the contract is signed, and the balance in five equal annual installments every December 31 thereafter, as evidenced by a non-interest-bearing note. The agreement provides that the franchisor shall provide the necessary initial services required under a franchise contract. By the end of the year, the company has performed all the initial services which costed Nana Tili P1,497,728. (Assume that the franchisee could borrow money at 12%.)

How much should the franchise be initially recognized?

What is the carrying value of the franchise on December 31, 2023?

Reference no: EM133122818

Questions Cloud

Value of a six-month american put option : The stock price is currently $30. Over each of the next two three-month periods, it is expected to go up by 8% or down by 8%. The risk-free interest rate is 10%
Transaction costs of creating home-made dividends : Paying a high dividend reduces the transaction costs of creating "home-made" dividends. Why?
How much goodwill was inherent in the purchase of little : During 2022 Little reported earnings of $80,000 and paid dividends of $10,000. How much goodwill was inherent in the purchase of Little
Students educational experience : Determine whether each of the following statements is True, False or Uncertain, and explain your answers.
What is the carrying value of the franchise on december : The company has performed all the initial services which costed Nana Tili P1,497,728. What is the carrying value of the franchise on December 31, 2023
Calculate the discount yield on commercial paper : Suppose a company purchases $1 million of 180-day commercial paper issued by VP, a large finance company, for a price of $993,482. Calculate the discount yield
What is the pro?tability index-piggly-wiggly inc : Piggly-Wiggly Inc., owns a parcel of land that is not zoned for grocery store operations. The company is loathed to let the land stand idle and has come up with
Strategic plan and mission of company : Describe how the product or service fits into the overall strategic plan and mission of the company.
What is bad debt expense for the year : Wanda reported sales of $1,000,000 and recorded accounts receivables write-offs of $10,000. What is bad debt expense for the year 2020

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare entries in journal form without explanations

Prepare entries in journal form without explanations to record the bond issue on November 1, 2009, and the payments of interest

  Discuss the importance of managerial accounting

Discuss the importance of managerial accounting as "decision-making tool" in your organization.Validate an idea with your own experience and additional research

  Annual rate of return of engles oil company

Engles Oil Company is considering investing in a new oil well. It is expected that the oil well will increase annual revenues by $130,000 and will increase annual expenses by $80,000 including depreciation.

  Determine the implied growth rate of GLDCs dividends

Determine the implied growth rate of GLDC's dividends (and earnings), assuming that the required rate of return of investors is 12 percent

  What is the capacity to adapt

Chambers' theory of accounting. Continuously Conternporary Accounting relies on the notion of the 'capacity to adapt'. What is the capacity to adapt

  What is the value of cost of goods sold

Eastview Company uses a perpetual LIFO inventory system, and has the following purchases and sales: What is the value of cost of goods sold

  Evaluate correct net working capital for the firm

Federal corporate income tax rates never exceeded an average rate of - Which of the following would result in a decrease in cash flow and a use of cash

  At what amount would the lease obligation be presented

At what amount would the lease obligation be presented on the balance sheet as of December 31, 2017? Round answers to the nearest whole dollar

  What is the value per share of your subsidiary

One of your companies that you are planning to sell paid a dividend today of $7.50 per share. What is the value per share of your subsidiary

  Calculate the contribution margin per unit

Fixed costs for 10,000 units are $5,000. Calculate the contribution margin per unit and the contribution margin ratio

  Compute the beginning cash balance

Compute the beginning cash balance assuming that common stocks and deficits are 1,400,000 and 500,000, respectively

  What are arguments in favor of being significant deficiency

Your audit team is performing audit procedures. What are the arguments in favor of this being a significant deficiency? Material Weakness? Not a problem?

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