Reference no: EM133182975

Question - On January 2, 2010, POKEMON signed an agreement to operate as a franchise of DIGIMON for an initial franchise fee of P10,000,000 for 10 years. Of this amount P2,000,000 was paid when the agreement was signed and the balance payable in four equal amount payments beginning on December 30, 2010. POKEMON signed a non-interest-bearing note for the balance. POKEMON rating indicates that it can be borrow money at 24% for a loan of this type. PV of an annuity of 1 for 4 periods at 24$ is 2.4 assume that the substantial services amounting to 1,020,000 had already been rendered by DIGIMON and that additional indirect franchise cost of P272,000 was also incurred if the collection of the note is not reasonably assured, what is the realized gross profit for the year ended Dec. 31, 2010? And why is it 2,420.800? Provide complete solution.