Valix Finacc vol 1 Problem 20-13

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 20 Problem 20-13

Books of Franchisee   

1. Franchise                                                                                          6,000,000                     

Cash                                                                                                                6,000,000             

2. Amortization of franchise                                                                   300,000

            Franchise (6,000,000 / 20)                                                                                    300,000

                                                                                                                                               

3. Cash                                                                                               25,000,000                                 Sales                                                                                                               25,000,000

 

4. Franchise fee expense                                                                      1,250,000

            Cash (25,000,000 x 5%)                                                                         1,250,000