Question
JANE creates a franchise for the sale of a particular product, JANE incurs P600,000 initial direct costs for each franchise granted. At December 31, 20x6,
JANE creates a franchise for the sale of a particular product, JANE incurs P600,000 initial direct costs for each franchise granted. At December 31, 20x6, JANE granted the following people franchises that have open accounts with JANE.
ANNA | BETTY | CHERRY | DANA | |
Cash paid (down payment) | 200,000 | 200,000 | 200,000 | 200,000 |
Note unpaid (face 1,000,000) | 700,000 | 400,000 | 910,000 | 550,000 |
Services completed | 25% | 10% | 95% | 100% |
Probability of collection | Likely | Unlikely | Unlikey | Likely |
Continuing franchise fee | 1% of NI | 1% of NI | 1% of NI | 1% of NI |
Period of refund | 1/31/2017 | 2/28/2017 | 12/30/2016 | 12/30/2016 |
What is the total revenue to be recognized by JANE on December 31, 20x6?
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Introduction To Business Law
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