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Romashka-Z-Leto [24]
3 years ago
7

Wildhorse Delight, Inc. charges an initial franchise fee of $74,700 for the right to operate as a franchisee of Wildhorse Deligh

t. Of this amount, $24,900 is collected immediately. The remainder is collected in four equal annual installments $12,450 each. These installments have a present value of $41,522. As part of the total franchise fee, Wildhorse Delight also provides training (with a fair value of $2,000) to help franchisees get the store ready to open. The franchise agreement is signed on April 1, 2017, training is completed, and the store opens on July 1, 2017. Prepare the journal entry required by Wildhorse Delight in 2017.
Business
1 answer:
ryzh [129]3 years ago
3 0

Answer:

Cash 24,900 debit

Account Receivable 51,800 debit

             Franchise fee revenue 74,700 credit

             training services revenue 2,000 credit

Explanation:

The training services and the francise fee are separated revenues, so we have to use diferent account.

we are only given with the information of a initial payment, so the difference will part of account payable.

No information about the training being paid in cash, so we also assume this services were performed on account.

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4 years ago
A July sales forecast projects that 5,000 units are going to be sold at a price of $12.50 per unit. The management forecasts 2%
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Answer:

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And the correct answer for this case would be:

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Explanation:

For this case the original number of sales for this case is 5000 units and the unitary price is given by 12.5 \frac{dollars}{unit}

And the total sales for the original case would be given by:

P_i = 5000 units *12.5\frac{dollars}{unit} = 62500 dollars

And for the new case we know that the sales increase by a factor of 2%, so then we can find the new number of sales like this:

1.02*5000 units= 5100 units

And the Total August sales would be given by:

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And the correct answer for this case would be:

$63,750

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