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 BETY CHERRY DANA
Cash paid (down payment) 200,000 200,000 200,000 200,000
Note unpaid (face P1,000,000) 700,000 400,000 910,000 550,000
Services completed 25% 10% 95% 100%
Probability of collection Likely Unlikely Unlikely 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 12/30/2015
What is the total revenue to be recognized by JANE on December 31, 20x6?
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