Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

GoRight Inc. (GRI) is a franchisor who sells the rights to its trademark to franchisees. The franchisee pays an upfront, nonrefundable deposit of $1.200. This

image text in transcribed
GoRight Inc. (GRI) is a franchisor who sells the rights to its trademark to franchisees. The franchisee pays an upfront, nonrefundable deposit of $1.200. This amount is used to cover the expenses for GRI preforming a check on the franchisee's background and credentials, interviews and preparation of the agreement is the franchisee is accepted. This takes only about four days to complete. If the franchisee passes this screening, a contract is signed with GRI. The contract states that for consideration of $144,000, the franchisee will have the right to use the trademark for a period of three years. The three-year period commences at the beginning of the month the contract is signed. At the end of the period, the contract can be extended for another two years on payment of an agreed-upon amount. The franchisee may pay the $144,000 in three instalments starting on the date the contract is signed. (The upfront fee is part of the $144,000 total) In other words, on signing of the contract, $48,000 is due, and then another $48,000 is paid in the next 30 days and the final $48,000 payment is due in 60 days (from the date of signing the contract). Failure to pay the amounts on time will forfeit the franchisee's right to use the trademark. If a franchise is revoked, GRO will retain an amount equal to 3% of the total $144,000 to cover administrative costs incurred and the remaining amounts received are refunded. In 20X4. GRI signed 15 contracts with various franchisees as detailed below. GRI has a December year-end. Number of Licence Amount Paid to Payments Not Month of Sale Agreements Signed Date 5 Yet Received April 2ex4 2 288,000 July 20x4 6 816,000 48,000 (note 1) October 20x4 4 576,000 November 20x4 3 288,000 144.000 Total 15 1,968,000 192,000 Note All franchisees made their payments on time, except for one who owed his last payment of $48.000. The rights to this franchise were revoked in November 20X4. Required: 1. Not available in connect 2. Give the required entries for 20x4 for each month. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollars.) View transaction list Journal entry worksheet 2. 3 5 Record the sales of licenses

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Organizational Auditing And Assurance In The Digital Age

Authors: Rui Pedro Marques, Carlos Santos, Helena InĂ¡cio

1st Edition

1522573569, 978-1522573562

More Books

Students also viewed these Accounting questions

Question

1. Identify three communication approaches to identity.

Answered: 1 week ago

Question

d. Who are important leaders and heroes of the group?

Answered: 1 week ago

Question

3. Describe phases of minority identity development.

Answered: 1 week ago