Bean Coffee Inc. operates and franchises coffee shops around the Philippines. On January 1, 2020, Bean Coffee entered

into a franchise agreement with a franchisee for a non-refundable initial franchise fee of P8,000,000 payable upon signing

of contract and ongoing payment of royalties based on 5% of franchisee's sales. The contract provides that Bean Coffee

shall render the following obligations to franchisee: (1) Construction of the coffee shop and delivery of coffee shop

equipment's with stand-alone selling price of P5,000,000; (2) Supplies of 100,000 units of coffee raw materials and

supplies with stand-alone selling price of P3,000,000; and 3) Allowing the franchisee to use the Bean Coffee's trademark

and tradename for a period of 10 years with stand-alone selling price of P2,000,000. Bean Coffee determines that the

three obligations under the contract with franchisee are each distinct, and therefore, need to be accounted for as a

separate performance obligation.

As of July 1, 2020, Bean Coffee has already completed the construction of the building and has fully delivered the relevant

coffee shop equipment's. However, only 40,000 units of coffee raw materials and supplies have been delivered to the

franchisee and eventually consumed by the coffee shop customers as of December 31, 2020. For the year ended

December 31, 2020, the franchisee reported sales revenue of P1,000,000.

16.

How much total revenue shall be reported by Bean Coffee Inc. for the year ended December 31, 2020? 

A. P5,170,000

B.P5,820,000

C.P6,410,000

D. P4,930,00