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    Franchise

    Uploaded by

    Angela Marie Penaranda
    The document contains details of revenue and expenses for three franchise problems. Problem 1 outlines revenue of ₱2,013,056 from an initial franchise fee and ₱95,000 from continuing fees. Total net income is ₱962,849.41. Problem 2 shows total revenue of ₱714,750 and a journal entry to record the transaction. Problem 3 calculates total revenue of ₱436,600 from an initial payment and continuing 5% fees, and net income of ₱458,839.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    Franchise

    Uploaded by

    Angela Marie Penaranda
    26 views6 pages
    The document contains details of revenue and expenses for three franchise problems. Problem 1 outlines revenue of ₱2,013,056 from an initial franchise fee and ₱95,000 from continuing fees. Total net income is ₱962,849.41. Problem 2 shows total revenue of ₱714,750 and a journal entry to record the transaction. Problem 3 calculates total revenue of ₱436,600 from an initial payment and continuing 5% fees, and net income of ₱458,839.

    Original Description:

    Problem set of franchise

    Original Title

    franchise

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    The document contains details of revenue and expenses for three franchise problems. Problem 1 outlines revenue of ₱2,013,056 from an initial franchise fee and ₱95,000 from continuing fees. Total net income is ₱962,849.41. Problem 2 shows total revenue of ₱714,750 and a journal entry to record the transaction. Problem 3 calculates total revenue of ₱436,600 from an initial payment and continuing 5% fees, and net income of ₱458,839.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    26 views6 pages

    Franchise

    Uploaded by

    Angela Marie Penaranda
    The document contains details of revenue and expenses for three franchise problems. Problem 1 outlines revenue of ₱2,013,056 from an initial franchise fee and ₱95,000 from continuing fees. Total net income is ₱962,849.41. Problem 2 shows total revenue of ₱714,750 and a journal entry to record the transaction. Problem 3 calculates total revenue of ₱436,600 from an initial payment and continuing 5% fees, and net income of ₱458,839.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 6

    PROBLEM 1

    1. September 01, 2021

    2. Total Revenue from Franchise

    Installment payment ₱ 320,000.00


    x PVF 3.7908
    Present value of the note ₱ 1,213,056.00

    Downpayment ₱ 800,000.00
    Present value of the note 1,213,056.00
    Franchise Fee Revenue 2,013,056.00
    Continuing Franchise Fee
    (1,900,000 x 5%) 95,000.00
    TOTAL REVENUE ₱ 2,108,056.00

    3. Total net income

    Initial Franchise Fee ₱ 2,013,056.00


    Cost of Franchise (740,000.00)
    GROSS PROFIT 1,273,056.00
    Continuing Franchise Fee 95,000.00
    Indirect costs
    (340,000 - 144,000) (484,000.00)
    Interest income 78,793.41
    TOTAL NET INCOME ₱ 962,849.41
    Computations
    Date Present value Payment Interest Income Amortized Cost
    Apr. 30, 2021 ₱ 1,213,056.00
    Dec. 1, 2021 1,213,056.00 ₱ 320,000.00 ₱ 70,761.60 ₱ 249,238.40
    Dec. 31, 2022 963,817.60 30,000.00 8,031.81 21,968.19

    4. Gross Profit Rate


    Gross Profit ₱ 1,273,056.00
    ÷ Revenue (IFF) 2,013,056.00
    GROSS PROFIT RATE 63.24%

    5. Journal entry on September 1, 2021

    Unearned Franchise Fee Revenue 2,013,056.00


    Franchise Fee Revenue 2,013,056.00

    Cost of Franchise Cost 740,000.00


    Prepaid Franchise Cost 740,000.00

    Franchise Expense 484,000.00


    Cash 484,000.00

    6. Journal entry on December 1, 2021

    Cash 320,000.00
    Unearned Interest Income 70,761.60
    Notes Receivable 320,000.00
    Interest Income 70,761.60
    PROBLEM 2
    1. Total revenue

    Downpayment ₱ 200,000.00
    PV of Note 656,000.00
    Less:
    Advertising expense 135,000.00
    Supplies and equipment 6,250.00
    TOTAL REVENUE ₱ 714,750.00

    Computations:
    Annual payment ₱ 160,000.00
    x PVF @ 7% 4.10
    Present value of the note ₱ 656,000.00

    2. Journal entry

    Cash 200,000.00
    Note Receivable 800,000.00
    Franchise Fee Revenue 714,750.00
    Unearned Franchise Fee Revenue 141,250.00
    Unearned Interest Income 144,000.00

    Computations:
    Advertising expense ₱ 135,000.00
    Supplies and Equipment 6,250.00
    Unearned Interest Income ₱ 141,250.00
    PROBLEM 3
    1. Total revenue

    Semi-annual payments ₱ 30,000.00


    x PVF 7.72
    Present value of the note ₱ 231,600.00

    Franchise Fee Revenue


    Cash ₱ 200,000.00
    Present value of the note 231,600 ₱ 431,600.00

    Contingent Franchise Fee Revenue


    1,000,000 x 5% 5,000.00
    TOTAL REVENUE ₱ 436,600.00

    2. Total net income

    Date Present value Payment Interest Income Amortized Cost


    Jan. 1, 2022 ₱ 231,600.00
    Jun. 30, 2022 231,600.00 ₱ 30,000.00 ₱ 11,580.00 ₱ 18,420.00
    Dec. 31, 2022 213,180.00 30,000.00 10,659.00 19,341.00

    Total revenue ₱ 436,600.00


    Interest Income
    ₱ 11,580.00
    10,659.00 22,239.00
    NET INCOME ₱ 458,839.00
    DatePresent value
    Payment
    Interest Income
    Amortized Cost
    Jan. 1, 2 #REF!
    Jun. 30, #REF! ### #REF! #REF!
    Dec. 31, #REF! ### #REF! #REF!

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