substantial performance no refunding collection

Downpayment ok ok ok Revenue 100

Installment ok ok ok Revenue 50
reasonable certain revenue accrual
unreasonble certain unearned
no basis wla
100
47
147
 12% 4 years
Present fo Value of 1 0.635518 240,000 Face Value
PV of OA of 1 3.037349 60000 182241 PV of IAR
PV of A due of 1 3.401831 57,759 DISCOUNT
SP NRP Collection
Downpayment 150,000 x ok ok Unearned
Installment 240,000 x ok x ignore
Initial Franchise Fee 390,000

SP NRP Collection
Downpayment 150,000 ok ok ok Revenue 150,000
Installment 240,000 ok ok ok Revenue 182241
Initial Franchise Fee 390,000 332,241

SP NRP Collection
Downpayment 150,000 ok ok ok Revenue
Installment 240,000 x ok ok Unearned
Initial Franchise Fee 390,000
Face Value

DISCOUNT

Cash 150,000
Unearned Franchise Revenue 150,000

Cash 150,000
Notes Receivable 240,000
Franchise Fee Revenue 332,241
Discount on NR 57,759

Cash 150,000
Notes Receivable 240,000
Franchise Fee Revenue 150,000
Unearned Franchise Fee Revenue 182241
Discount on NR 57,759
 4 years substantial performance no refund period
Downpayment 320,000 320,000 ok ok
Installment 320000 1,280,000 1,014,400 ok ok
1,600,000 1,334,400 265,600
Less: Bargain Purchase
Selling Prince 100,000
Cost 120,000 20,000 unearned
Less: Advertising
Years 5
Months 12
2000 120,000 unearned
Initial Franchise Fee 1,194,400
Collection
ok Revenue
ok Revenue

Books of Franchisor (Spag. Inc)

Cash 320,000
Notes Receivable 1,280,000
Franchise Fee Revenue 1,194,400
Unearned Franchise Fee Revenue 140,000
Discount on NR 265,600

Unearned Franchise Fee 20,000

Cash 100,000
Franchise Fee Revenue 120,000

Cost of Sales 100,000

Inventory - K & Supplies 100,000
 Books of Franchisee
Franchise 1,334,400
Discount on Notes Payable 265,600
Cash 320,000
Notes Payable 1,280,000
 20,000,000 sales
5%
4% 1%
800000 200000 advertising exp
Books of Franchisor
Cash 800000
Continuing Franchise fee Revenue 800000

Cash 200000
Unearned Continuing Franchise fee Revenue 200000

Unearned Continuing Franchise fee Rev 200000

Continuing Franchise fee Revenue 200000

Advertising Exp 100,000

Cash 100,000
 SP
Downpayment 1,200,000
Installment 800,000 4 3,200,000
10% 4
Cash 1,200,000
PV of Installement 3.16986545 2,535,892 Date Payment
Initial Franchise Fee 3,735,892 Jun 30 ,2014
Face Value 3,200,000 Jun 30 ,2015 800,000
PV of Installement 2,535,892 Jun 30 ,2016 800,000
664,108 Jun 30 ,2017 800,000
Books of Franchisor Jun 30 ,2018 800,000
Cash 1,200,000
Notes Receivalbe 3,200,000
Unearned Franchise Fee Revenue 3,735,892
Discount on Notes Receivable 664,108

Deferred Franchise Cost 500,000

Cash 500,000
Interest Income 126,795
Deferred Franchise Cost 30,000 S and Admin Exp 85,000
Cash 30,000 41,795

Selling and Admins Exp 60,000

Cash 60,000

Dec 31, Selling and Admins Exp 25,000

Accounts Payable 25,000

Discount on NR 126,795
Interest Income 126,795
2,015
jan 10, Deferred Franchise Cost 500,000
Cash 500,000

Jan 15, Unearned Franchise Fee 3,735,892

Franchise Fee Revenue 3,735,892

Cost of Franchise Revenu 1,030,000

Deferred Franchise Cost 1,030,000

Jun 30, cash 800,000

Notes Receivable 800,000

Discount on NR 126,795
Interest Income 126,795
5%
June 30, Cash 150,000
Continuing Franchise Fee 150,000
Dec 31, S and A exp 136,000
Accounts Payable 136,000

Cash 180,000
Continuing Franchise Fee 180,000
NRP Collection
x unearned
unearned

10%
Intest Income Reductio toCV
2,535,892
253,589.24 546,411 1,989,482
198,948.16 601,052 1,388,430
138,842.98 661,157 727,273
72,727.27 727,273 -
 10% 3 years
Present fo Value of 1 0.751315 84,000 Face Value
PV of OA of 1 2.486852 28,000 69,632 PV of AR
PV of A due of 1 2.735537 14,368 DISCOUNT
SP NRP Collection
Downpayment 56,000 ok ok ok Revenue 56,000
Installment 84,000 ok ok ok revenue 69,632
Initial Franchise Fee 140,000 125,632

SP NRP Collection
Downpayment 56,000 x x ok unearned 56,000
Installment 84,000 x x x ignore
Initial Franchise Fee 140,000 56,000

SP NRP Collection
Downpayment 56,000 ok ok ok Revenue 56,000
Installment 84,000 x ok ok Unearned 69,632
Initial Franchise Fee 140,000 125,632
Cash 56,000
Notes Receivable 84,000
Franchise Fee Revenue 125,632
Discount on Notes Receivable 14,368

Cash 56,000
Unearned Franchise Revenue 56,000

Cash 56,000
Notes Receivable 84,000
Franchise Fee Revenue 56,000
Unearned Franchise Fee Revenue 69,632
Discount on NR 14,368
 11% 5 4
years substantial performance
Downpayment 20,000 20,000 ok
Installment 16,000 80,000 59,134 ok
3.69589701764947 100,000 79,134
Less: Bargain Purchase
Selling Prince
Cost 0 unearned
Less: Advertising
Years
Months
0 unearned
Initial Franchise Fee 79,134

Face Value 80,000

PV of Notes Receivable 59,134
Discount on Notes Receivable 20,866

c.1
substantia no refund pCollection
Downpayment ok ok ok revenue
Installment x ok ok unearned

Revenue 20,000
Unearned Franchise Fee - Liability 59,134

c.2
substantia no refund pCollection
Downpayment ok ok ok revenue
Installment ok ok x ignore

Revenue 20,000
Unearned Franchise Fee - Liability 0

c.3
substantia no refund pCollection
Downpayment x ok ok unearned
Installment ok ok x ignore

Revenue 0
Unearned Franchise Fee - Liability 20,000
 a) Revenue
no refund period Collection 79,134
ok ok Revenue b)
ok ok Revenue Books of Franchisor (Cream Inc.)
Cash 20,000
Notes Receivable 80,000
Unearned Franchise Fee Revenue 59,134

Books of Franchisor (Cream Inc.) Books of Franchisee

Cash 20,000
Notes Receivable 80,000
Franchise Fee Revenue 79,134
Unearned Franchise Fee Revenue 0
Discount on NR 20,866

Unearned Franchise Fee 0

Cash 100,000
Franchise Fee Revenue 120,000

Cost of Sales 100,000

Inventory - K & Supplies 100,000
 Books of Franchisee (Lebron Jam)
Franchise 59,134
Discount on Notes Payable 20,866
Cash 20,000
Notes Payable 80,000

Books of Franchisee (Lebron Jam)

Franchise 79,134
Discount on Notes Payable 20,866
Cash 20,000
Notes Payable 80,000