Happy Citrus started selling franchise locations in April 2026. The franchisee pays continuing fees based on annual sales. The initial fee relates to finding a store location and training the franchisee at Happy Citrus' training facility over a 2-year period. Initial franchise fee Continuing franchise fees Franchise sold Franchisees' reported sales ✪ Fiscal 2026 Fiscal 2027 $85,000 $95,000 4% 3% 3 5 $1,500,000 $2,000,000 Required: a) Assume that management estimates that 40% of the value of services related to the initial fee is fulfilled in the first year of signing the franchise agreement. Provide the journal entries to record how Happy Citrus should record revenues relating to initial franchise fees in fiscal 2026 and in 2027. Ignore the time value of money. Please use Excel formula for your calculation.
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- On Jan. 1, 2020, ABC Corporation entered into a franchise agreement with a P570,000 cash payment as initial franchise fee. The fee covers the initial services with the following stand- alone prices. Location identification Market Study P 150,000 Manager Training 200,000 P 50,000 Employee Training ABC charges a mark-up on cost of 25% when it computes the stand-alone prices of all its services. On Jan 31, 2020, ABC has completed the location identification and market study. How much is the gross profit from the franchise to be reported in the income statement for January 2020? 200,000On Jan. 1, 2020, ABC Corporation entered into a franchise agreement with a P570,000 cash payment as initial franchise fee. The fee covers the initial services with the following stand- alone prices. Location identification Market Study P 150,000 Manager Training APIZ Employee Training P 50,000 200,000 ABC charges a mark-up on cost of 25% when it computes the stand-alone prices of all its services. On Jan 31, 2020, ABC 200,000 a has completed the location identification and market study. How much is the gross profit from the franchise to be reported warning with mandatory dotyvolalain tensprejto in the income statement for January 2020?spension to dismissal/ non-readmission withMarin Shed Solutions sells its largest shed for $1,100 plus HST of 13 %. On May 10, 2024, it sold 26 of these sheds. On May 17,2024, the company sold 85 of these sheds. All sales are cash sales. For each day's sales, calculate the HST. May 10, 2024 May 17, 2024 Question Part Score $ Date $ HST payable Prepare a journal entry to record the sales. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Account Titles Debit --/2 Credit
- Premium Obligation Yummy Cereal Company is offering one toy shovel set for 15 box tops of its cereal. Year-to-date sales have been off, and it is hoped that this offer will stimulate demand. Each shovel set costs the company 3. The following data are available for the last 3 months of 2019: It is estimated that only 70% of the box tops will be redeemed. The cereal sells for 2.80 per box. Required: 1. Prepare journal entries for each month to record sales, shovel set purchases, and redemptions. 2. Assuming Yummy prepares monthly financial statements, indicate how the inventory of premiums and the estimated liability would be disclosed on Yummys ending balance sheets for October, November, and December.Percentage of Credit Sales Method Ruby Red manufactures, markets, and distributes citrus flavored soft drinks across the globe. Ruby Red hired a collection agency in 2018 to increase collection rates from customers. As a result, Ruby estimates that only 2% of its 2019 credit sales will be written off, compared to the 4% of 2018s credit sales that were estimated to be uncollectible. At December 31, 2019, Ruby Red has a $12,800 credit balance in its allowance for doubtful accounts and credit sales of $1,570,000. Required: Use the percentage of credit sales method to calculate the bad debt expense.Cash Rebates On January 1, 2020, Fro-Yo Inc. began offering customers a cash rebate of 5.00 if the customer mails in 10 proof-of-purchase labels from its frozen yogurt containers. Eased on historical experience, the company estimates that 20% of the labels will be redeemed. During 2020, the company sold 5,000,000 frozen yogurt containers at 1 per container. From these sales, 800,000 labels were redeemed in 2020, 150,000 labels were redeemed in 2021, and the remaining labels were never redeemed. Required: 1. Prepare the journal entries related to the sale of frozen yogurt and the cash rebate offer for 2020 and 2021. 2. Next Level Assume that 300,000 labels were redeemed in 2021. Prepare the journal entries related to the cash rebate offer for 2021.
- Current Attempt in Progress Sunland Company sells goods to Sandhill Company during 2025. It offers Sandhill the following rebates based on total sales to Sandhill. If total sales to Sandhill are 10,500 units, it will grant a rebate of 3%. If it sells up to 18,300 units, it will grant a rebate of 5%. If it sells up to 30,800 units, it will grant a rebate of 6%. In the first quarter of the year, Sunland sells 10,800 units to Sandhill at a sales price of $118,800. Sunland, based on past experience, has sold over 37,800 units to Sandhill, and these sales normally take place in the third quarter of the year. What amount of revenue should Sunland report for the sale of the 10,800 units in the first quarter of the year? Revenue $Allocating Transaction Price to Performance Obligations and Recording Sales Value Dealership Inc. markets and sells the vehicles to retail customers. Along with a new vehicle purchase, a customer will receive a free annual maintenance contract for one year from the date of purchase. The standalone selling price of a vehicle is $30,000 and the standalone selling price for the annual maintenance contract is $400. During October 2020, Value Dealership Inc. sold 30 vehicles for $30,250 per vehicle, each with a free annual maintenance contract. When answering the following questions: Round each allocated transaction price to the nearest dollar. If a journal entry (or a line of the journal entry) isn't required for the transaction, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero). a. Ignoring the cost entries, record the journal entry in October 2020 for Value Dealership’s sale of vehicles with the associated maintenance contracts to customers.…Identifying Performance Obligations and Recording Revenue from Franchise Rights The Krispy Donuts franchise has agreements with 100 franchisees across the United States to operate bakeries. On January 1, 2020, Krispy Donuts grants a franchisee the right to operate a bakery in Minneapolis, Minnesota using the Krispy Donut’s brand name, recipe, and other business concepts for a price of $1,000,000. On January 1, 2020, the franchisee made a down payment to the franchisor of $100,000 and paid the remaining $900,000 upfront fee on March 31, 2020. In exchange for the $1,000,000 payment, the franchisee received franchise rights, which include benefits of a national advertising campaign over the ten-year period (starting on the contract date) to promote the brand name of Krispy Donuts. The payment also includes the purchase of kitchen equipment from the franchisor (fair value of $120,000), and upfront training and assistance in setting up the franchise (fair value of $40,000). The training…
- Flapper Jack's Pancake Restaurants Inc. sells franchises for an initial fee of $38,000 plus operating fees of $700 per month. The initial fee covers site selection, training, computer and accounting software, and on-site consulting and troubleshooting, as needed, over the first five years. On March 15, 2020, Tim Cruise signed a franchise contract, paying the standard $6,400 down with the balance due over five years with interest. Assuming that the initial services to be performed by Flapper Jack's subsequent to the signing are substantial and that collection of the receivable is reasonably assured, the journal entry required at signing would include a credit to: Multiple Choice O Deferred revenue for $38,000. Deferred revenue for $31,600. Franchise fee revenue for $38,000. Franchise fee revenue for $6,400.The following information relates to Puregold Price Club Inc. (PPCI) for the year 2022. PPCI has a pricing policy that allows 30% profit on the sales price. Unearned Revenue from Gift Certificates Outstanding, January 01, 2022 - P250,000 Gift certificates sold during the year - P900,000 Gift certificates issued relating to sales promotion during the year - P100,000 Gift certificates redeemed during the year - P900,000 Gift certificates relating to the entity’s promotion that expired during the year - P12,500 Additional outstanding gift certificates expected to expire in 2022 - P6,000 How much is the unearned revenue from gift certificates outstanding at December 31, 2022? a. P331,500 b. P337,500 c. P232,050 d. P236,250Question: Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2024 with a refund liability of $300,000. During 2024, Halifax sold merchandise on account for $11,500,000. Halifax's merchandise costs are 65% of merchandise selling price. Also during the year, customers returned $450,000 in sales for credit, with $250,000 of those being returns of merchandise sold prior to 2024, and the rest being merchandise sold during 2024. Sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at the end of the year. Required: Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns in 2024 of merchandise that was sold during 2024; and (c) adjust the refund liability to its appropriate balance at year end. What is the…