64. On January 2, 2021, SMART, Inc. authorized Lima Company to operate as a franchisee for an initial franchise fee of P750,000. Of this amount, P300,000 was received as down payment upon signing the agreement, and the balance represented by a 12% note due in three annual payments, beginning December 31,2021, SMART rendered the required initial services at a cost of P150,000 and Lima was able to operate the franchise on April 27,2021.

Assuming the collection of the note is not reasonably assured, the realized revenue from the initial franchise on December 31,2021 is:

a. P360,000 b. P650,000 c. P300,000 d. P450,000

65. Franchise fees are properly recognized as revenue

a. when received in cash.

b. when a contractual agreement has been signed.

c. after the franchise business has begun operations.

d. after the franchiser has substantially performed its service.

For items 66-70

On January 3, 2019, Mona Services, Inc., signed an agreement authorizing Lisa Company to operate as a franchisee over a 20-year period for an initial franchise fee of P500,000 payable as follows: P100,000 to be paid upon signing of the contract and the balance in four annual payments every end of this year starting December 31, 2019. Lisa commenced operations on July 1, 2019, at which date all of the initial services required of Mona had been performed. The agreement also provides that Lisa must pay a continuing franchise fee equal to 5% of the revenue from the franchise annually to Mona. Lisa's franchise revenue for 2019 and 2020 was P800,000 and P1,500,000 respectively.

66. For the year ended December 31, 2019, how much is the total revenue of Mona Service in respect of the Lisa Companys franchise assuming collectability of the non-interest- bearing-note is assured. The implicit interest rate on this type of loan is 18%.

a. P409,006

b. P381,006

c. P427,006

d. P457,427

67. For the year ended December 31, 2019, how much is the total revenue of Mona Service in respect of the Lisa Companys franchise assuming collectability of the non-interest- bearing-note is NOT assured. The implicit interest rate on this type of loan is 18%.

a. P240,000

b. P191,579

c. P140,000

d. P209,579

68. For the year ended December 31, 2019, how much is the total revenue of Mona Service in respect of the Lisa Companys franchise assuming collectability of the interest- bearing-note is assured. The stated interest rate is 18%.

a. P472,000

b. P500,000

c. P572,000

d. P540,00

69. For the year ended December 31, 2019, how much is the total revenue of Mona Service in respect of the Lisa Companys franchise assuming collectability of the interest- bearing-note is NOT assured. The stated interest rate is 18%.

a. P272,000

b. P218,000

c. P172,000

d. P240,00

70. For the year ended December 31, 2020, how much is the total revenue of Mona Service in respect of the Lisa Companys franchise assuming collectability of the interest- bearing-note is NOT assured. The stated interest rate is 18%.

a. P75,000

b. P175,000

c. P229,000

d. P154,000