Compute for:

-Total Revenue Recognized

-Revenue from Sales-based royalty

-Transaction Price

- Franchise Revenue recognized from 3 district promises

FRANCHISE ACCOUNTING (PFRS 15) PROBLEM 4. JOLLIBI FEEDS CORPORATION operates and licenses franchise all over the Philippines. On January 3, 2018, it authorizes BEBIBOY to sell its products under its trade name. The initial franchise fee amounted to P2million of which a non-refundable payment of P500,000 should be made at the time of contract signing and the balance is represented by a 10% interest bearing note for five equal annual installments starting December 31, 2018. The contract package calls for the following provisions: - Five-year duration of franchise license - Training of management and employees for six months - Sales of equipment and machineries, and one-month supply of initial products Based on the prevailing market prices for the above goods and services, the following stand-alone prices were determined: Rights to the trade name, market area, technical and proprietary know-how P850,000 Machineries,equipmentandinitialproducts950,000 Services training etc. 700,000 In addition, a royalty of 5% shall be collected for every month of sales. The outlet has been established on October 3, 2018 and began operations ever since. Total sales for the year amounted to P350,000