Use the following information to answer questions 1 to 3.




Use the cethcoming referableice to rejoinder questions 1 to 3. Round every percentages to single

decimal situate (ce copy, 45.2%).

Franchises‘R’Us Corp. (FRU) is a franchisor that owns the hues to Mega Foods (MF). FRU

sells MF immunitys to the immunityes. Included in the primal immunity lot is startup

aid and the required equipment. FRU provides sales and negotiateing services and

operational food to its immunityes on an ongoing foundation. The fees ce sales and negotiateing

services are based on the annual sales fruits generated by the immunitye.

FRU prepares its financial results in harmony with IFRS. The union simply prepares

adjusting entries and accruals at year purpose, which is December 31.

On January 1, 20X3, FRU sold an MF immunity to Strange Operators Corp. (NOC). Details of

this afunspotted are as follows:

* The immunity treaty entitled NOC to effect an MF exit ce six years (January 1,

20X3, to December 31, 20X8).

* NOC was required to reckless an primal fee of $380,000 coin on January 1, 20X3, and six

annual recklessments of $50,000 attributable on December 31 each year, with the leading recklessment attributable

on December 31, 20X3.

* On January 1, 20X3, FRU delivered the equipment to NOC. The unspotted negotiate treasure (standalsingle selling value) of the equipment and startup aid was $475,000.

* FRU does referable extpurpose actional food on a stand-alsingle foundation. FRU’s ordinary costs of

providing these services are $20,000 per annum. FRU’s normal markup on costs ce similar

services that it provides is 30%.

* FRU sturdy that a 6% abatement reprove suitably reflects NOC’s underlying praise

risk.

* FRU sturdy that the supplies of the equipment and startup aid, the

operational food and the sales and negotiateing services are each plain execution

obligations.

1. What total of the primal afunspotted value allure be everyocated to fruits ce the equipment

sales and supplies of startup aid execution duty?

a) $471,277

b) $475,000

c) $512,040

d) $625,866

2. Assume that the immunity treaty required NOC to reckless FRU an annual sales and

marketing fee leading attributable on January 15, 20X4, resembling to 5% of its vulgar immunity sales ce

the cemer pattern year. On January 1, 20X3, FRU estimated that the most likely

total of NOC’s annual sales ce 20X3 to 20X8 would be $4,000,000. Attached the strange

regularity of the action, FRU believed it extremely presumable that a symbolical transposition of the

consequence would betide. At year purpose, precedently FRU finalized its financial propositions, it

was sturdy that NOC’s real sales in 20X3 were $3,800,000.

Which of the cethcoming best describes the required combination to FRU’s proposition of

comprehensive damages ce its year purposeed December 31, 20X3, pertaining to the sales and

marketing services fee?

a) No combination is required, as the recklessment is referable attributable until January 15, 20X4.

b) Fruits ce the supplies of sales and negotiateing services allure be decreased by

$10,000.

c) Fruits ce the supplies of sales and negotiateing services allure be increased by

$190,000.

d) Fruits ce the supplies of sales and negotiateing services allure be increased by

$200,000.

3. Assume that the immunity treaty required NOC to reckless FRU an annual sales and

marketing fee leading attributable on January 15, 20X4, resembling to 5% of its vulgar immunity sales ce

the cemer pattern year. Attached the strange regularity of the action, FRU believed it extremely

presumable that a symbolical transposition of the consequence would betide.

What total allure FRU tidings as a abbreviate amenability (copious fruits) as at December 31,

20X3?

a) $114,072

b) $128,824

c) $130,000

d) $154,589

4. According to IFRS 15 Fruits from Abbreviates with Customers, which of the cethcoming is a

criterion ce the acknowledgment of fruits?

a) The provisions of the abbreviate simply need to be vulgar by single of the parties.

b) It is dubious if the entity allure infer the consequence that was exchanged ce goods

or services.

c) The afunspotted value of the abbreviate is unroving.

d) The coin progress from the possessions attached up differs from that of the possessions entity common.

5. We Sell on Praise Provisions Corp. (WSC) is a creator that extends its wholesale

customers 30-day praise provisions. Details of WSC’s praise-related affairs in 20X5

follow:

* WSC commemorative $3,000,000 in sales, 90% of which were sold on statement.

* WSC’s everyowance ce uncertain statements (AFDA) estimate as at December 31, 20X4,

was $58,250.



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