Question

How should a franchisor account for continuing franchise fees and routine sales of equipment and supplies...

How should a franchisor account for continuing franchise fees and routine sales of equipment and supplies to franchisees?

Homework Answers

Answer #1

Accounting for continuing franchise fees and routiine sales of equipment and supplies to franchisess is as follows :

continuing franchise fees should be reported as revenue when they are earned and receivable from the franchisee,unless a portion of them have been designated for a particular purpose.In that case ,the designated amount should be recognised as revenue,with the costs charged to an expense account.continuing product sales will be accounted for in the same manner as would be any other product sales.

Thank You

Please comment for any doubts on above

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. has asked you to determine whether it is possible for a franchisor to have a...
1. has asked you to determine whether it is possible for a franchisor to have a degree of control over its franchisees consistent with a master-servant relationship without a master-servant relationship arising as a matter of law.     What considerations should McDonald’s take into account in forging franchise agreements that ensure uniformity of content and customer experiences without triggering a master-servant relationship between McDonald’s and its franchisees? 2. Should corporate governance law seek to create incentives for shareholder participation or...
15. Pizza Company received $10,000 in cash franchise fees based on weekly sales. $8,000 of the...
15. Pizza Company received $10,000 in cash franchise fees based on weekly sales. $8,000 of the amount was due from franchise sales recorded in the previous month and recorded as accounts receivable and the remainder is from sales from the current month. What is the cash revenue and accrual revenue? a. Cash Revenue is $10,000 and accrual revenue is $10,000 during the current month b. Cash Revenue is $10,000 and accrual revenue is $8,000 during the current month c. Cash...
Monitor Muffler sells franchise arrangements throughout the United States and Canada. Under a franchise agreement, Monitor...
Monitor Muffler sells franchise arrangements throughout the United States and Canada. Under a franchise agreement, Monitor receives $680,000 in exchange for satisfying the following separate performance obligations: (1) franchisees have a five-year right to operate as a Monitor Muffler retail establishment in an exclusive sales territory, (2) franchisees receive initial training and certification as a Monitor Mechanic, and (3) franchisees receive a Monitor Muffler building and necessary equipment. The stand-alone selling price of the initial training and certification is $16,600,...
How much should be deposited each year into a retirement account starting now and continuing through...
How much should be deposited each year into a retirement account starting now and continuing through year 9, if you want to be able to withdraw $59,000 per year forever, at the beginning 30 years from now? 9% per year. Enter the positive value.
The balance in the supplies account, before adjustment at the end of the year, is $5,330....
The balance in the supplies account, before adjustment at the end of the year, is $5,330. The year end is December 31. Journalize the December 31 adjusting entry required if the amount of supplies on hand at the end of the year is $1,875. Refer to the Chart of Accounts for exact wording of account titles. Chart of Accounts CHART OF ACCOUNTS General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 15 Land 16 Equipment 17...
Prepaid Maintenance $6,000 Commission Fees Earned $97,000 Supplies 10,400 Rent Expense 10,800 Unearned Commission Fees 10,700...
Prepaid Maintenance $6,000 Commission Fees Earned $97,000 Supplies 10,400 Rent Expense 10,800 Unearned Commission Fees 10,700 Required Prepare the necessary adjusting entries in the general journal as of December 31, assuming the following: Could you please help me figure out what the rent expense/rent payable amount should be? On September 1, the company entered into a prepaid equipment maintenance contract. Burns Company paid $6,000 to cover maintenance service for six months, beginning September 1. The $6,000 payment was debited to...
Account Debit Credit Cash $1,300 Merchandise inventory 46,000 Store supplies 18,900 Store equipment 147,600 Accumulated depreciation,...
Account Debit Credit Cash $1,300 Merchandise inventory 46,000 Store supplies 18,900 Store equipment 147,600 Accumulated depreciation, store equipment 29,000 Accounts payable 12,000 Nymeth Sarda, capital 158,800 Nymeth Sarda, withdrawals 2,000 Sales 342,200 Sales discounts 3,000 Sales returns and allowances 9,000 Cost of goods sold 111,600 Sales salaries expense 94,000 Rent expense, selling space 12,000 Office supplies expenses    1,000 Rent expense, office space 56,000 Advertising expense 39,600 Totals $542,000 $542,000 Required Prepare a classified multi-step income statement.
Internal Controls for Cash Received on Account – Hudson Company sells supplies to restaurants. Most sales...
Internal Controls for Cash Received on Account – Hudson Company sells supplies to restaurants. Most sales are made on open account (credit sales). Hudson has requested your help in designing procedures for processing checks received from its customers. Briefly describe the procedures that should be used in each of the following departments: a. Mailroom b. Treasurer’s department c. Controller’s department
A lessor has an account, Equipment leased to others, and the related account, Accumulated Depreciation: Equipment...
A lessor has an account, Equipment leased to others, and the related account, Accumulated Depreciation: Equipment leased to others , on its year-end balance sheet.How should the lease related to these account be classified? a) operation lease b) direct financing lease c) sales type lease d) leveraged lease.
How much must you deposit each year into your retirement account starting now and continuing through...
How much must you deposit each year into your retirement account starting now and continuing through year 10 if you want to be able to withdraw $90,000 per year forever, beginning 27 years from now? Assume the account earns interest at 13% per year.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT