UCC Mock Board Exam 2021 AFAR 70 PDF

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UNIVERSITY OF CALOOCAN CITYBACHELOR OF SCIENCE IN ACCOUNTANCYMOCK BOARD EXAMINATION 2021ADVANCED FINANCIAL ACCOUNTING AND REPORTING In the absence of partnership agreement to the contrary, what is the obligation of the partners as regards to capital contribution? A shall contribute equally. B shall ...

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UNI VERSI TYOFCALOOCANCI TY BACHELOROFSCI ENCEI NACCOUNT ANCY MOCKBOARDEXAMI NATI ON2 0 2 1 ADVANCEDFI NANCI ALACCOUNTI NGANDREPORTI NG

1 . I nt h ea b s e n c eo f p a r t n e r s h i pa g r e e me n t t ot h ec o n t r a r y , wh a t i st h eo b l i g a t i o no f t h ep a r t n e r sa sr e g a r d st oc a p i t a l c o n t r i b u t i o n ? A.Th e ys h a l l c o n t r i b u t ee q u a l l y . B. Th e ys h a l l c o n t r i b u t eb a s e do nt h e i rl o s sa g r e e me n t . C.Th e ys h a l l c o n t r i b u t eb a s e do nt h e i rp r o fi t a g r e e me n t . D.Th e ys h a l l c o n t r i b u t eb a s e do nt h e i rwi t h d r a wa l a g r e e me n t . 2 . A, Ba n dCd e c i d e dt of o r mABCPa r t n e r s h i p . I t wa sa g r e e dt h a t Awi l l c o n t r i b u t ea ne q u i p me n t wi t ha s s e s s e dv a l u e o f P1 0 0 , 0 0 0wi t hh i s t o r i c a l c o s t o f P8 0 0 , 0 0 0a n da c c u mu l a t e dd e p r e c i a t i o no f P6 0 0 , 0 0 0 . Bwi l l c o n t r i b u t eal a n da n db u i l d i n gwi t hb o o kv a l u eo fP1 , 2 0 0 , 0 0 0a n df a i rma r k e tv a l u eo fP1 , 5 0 0 , 0 0 0 .Th el a n d a n db u i l d i n gi ss u b j e c t t oamo r t g a g ep a y a b l ea mo u n t i n gt oP3 0 0 , 0 0 0t ob ea s s u me db yt h ep a r t n e r s h i p . Th ep a r t n e r sa g r e e dt h a tBwi l lh a v e6 0 %c a p i t a li n t e r e s ti nt h ep a r t n e r s h i p .Th e ya g r e e dt h a tCwi l lc o n t r i b u t e s u ffic i e n t c a s ht ot h ep a r t n e r s h i p . Ad a ya f t e r t h ep a r t n e r s h i pf o r ma t i o n , t h ee q u i p me n t wa ss o l df o rP3 0 0 , 0 0 0 . Wh a t i st h et o t a l a g r e e dc a p i t a l i z a t i o no f t h eABCPa r t n e r s h i p ? A.P1 , 5 0 0 , 0 0 0 C.P2 , 5 0 0 , 0 0 0 B. P2 , 0 0 0 , 0 0 0 D.P3 , 0 0 0 , 0 0 0 OnJ a n u a r y1 ,2 0 2 1 ,A,Ba n dCf o r me dABCPa r t n e r s h i pwi t ho r i g i n a l c a p i t a l c o n t r i b u t i o no f P3 0 0 , 0 0 0 ,P5 0 0 , 0 0 0 a n dP2 0 0 , 0 0 0 . Ai sa p p o i n t e da sma n a g i n gp a r t n e r . Du r i n g2 0 2 1 ,A,Ba n dCma d ea d d i t i o n a l i n v e s t me n t so fP5 0 0 , 0 0 0 ,P2 0 0 , 0 0 0a n dP3 0 0 , 0 0 0 ,r e s p e c t i v e l y .Att h e e n do f 2 0 1 8 , A, Ba n dCma d ed r a wi n g so f P2 0 0 , 0 0 0 , P1 0 0 , 0 0 0a n dP4 0 0 , 0 0 0 , r e s p e c t i v e l y . At t h ee n do f 2 0 2 1 , t h ec a p i t a l b a l a n c eo f Ci sr e p o r t e da t P3 2 0 , 0 0 0 . Th ep r o fi t o rl o s sa g r e e me n t o f t h ep a r t n e r si s p r o v i d e db e l o w:  1 0 %i n t e r e s t o no r i g i n a l c a p i t a l c o n t r i b u t i o no f t h ep a r t n e r s .  Qu a r t e r l ys a l a r yo f P4 0 , 0 0 0a n dP1 0 , 0 0 0f o r Aa n dB, r e s p e c t i v e l y .  Bo n u st oAe q u i v a l e n t t o2 0 %o f Ne t I n c o mea f t e r i n t e r e s t a n ds a l a r yt oa l l p a r t n e r s  Re ma i n d e ri st ob ed i s t r i b u t e de q u a l l ya mo n gt h ep a r t n e r s . 3 . Wh a t i sC’ ss h a r ei nt h ep a r t n e r s h i pp r o fi t f o r t h ey e a re n d e dDe c e mb e r 3 1 , 2 0 2 1 ? A.P1 2 0 , 0 0 0 C.P2 2 0 , 0 0 0 B. P1 8 0 , 0 0 0 D.P3 2 0 , 0 0 0 4 . Wh a t i st h eb o n u sg i v e nt oAa sma n a g i n gp a r t n e rf o r t h ey e a re n d e dDe c e mb e r 3 1 , 2 0 2 1 ? A.P6 0 , 0 0 0 C.P1 2 0 , 0 0 0 B. P1 0 0 , 0 0 0 D.P1 5 0 , 0 0 0

5 . OnDe c e mb e r3 1 ,2 0 2 1 ,ABCPa r t n e r s h i p ’ sSt a t e me n to fF i n a n c i a l Po s i t i o n ss h o wst h a tA,Ba n dCh a v ec a p i t a l b a l a n c e so f P5 0 0 , 0 0 0 , P3 0 0 , 0 0 0a n dP2 0 0 , 0 0 0wi t hp r o fi t o rl o s sr a t i oo f 1 : 3 : 6 . OnJ a n u a r y1 , 2 0 2 2 , Cr e t i r e df r o m t h ep a r t n e r s h i pa n dr e c e i v e dP3 5 0 , 0 0 0 . At t h et i meo f C’ sr e t i r e me n t , a na s s e t o f t h ep a r t n e r s h i pi su n d e r v a l u e d . Wh a t i st h ec a p i t a l b a l a n c eo f Aa f t e rt h er e t i r e me n t o f C? A.P4 6 2 , 5 0 0 C. P5 3 7 , 5 0 0 B. P5 2 5 , 0 0 0 D. P5 6 2 , 5 0 0 6 . Wh i c ho f t h ef o l l o wi n gwi l l n o t r e s u l t t od i s s o l u t i o no f ag e n e r a l p a r t n e r s h i p ? A.De a t ho f ap a r t n e r B. I n s o l v e n c yo f ap a r t n e r C.Re t i r e me n t o f ap a r t n e r D.As s i g n me n t o f ap a r t n e r ’ si n t e r e s t t oat h i r dp e r s o n OnDe c e mb e r3 1 ,2 0 2 0 , t h eSt a t e me n to fFi n a n c i a l Po s i t i o no f ABCPa r t n e r s h i pwi t hp r o fi to rl o s sr a t i oo f5 : 3 : 2i s p r e s e n t e da sf o l l o ws : Ca s h No n c a s ha s s e t

P1 , 6 0 0 , 0 0 0 1 , 4 0 0 , 0 0 0

T o t a l L i a b i l i t i e s A, Ca p i t a l B, Ca p i t a l C, Ca p i t a l

P2 , 0 0 0 , 0 0 0 1 0 0 , 0 0 0 5 0 0 , 0 0 0 4 0 0 , 0 0 0

OnJ a n u a r y1 ,2 0 2 1 ,t h ep a r t n e r sd e c i d e dt ol i q u i d a t et h ep a r t n e r s h i pi ni n s t a l l me n t .Al lp a r t n e r sa r el e g a l l y d e c l a r e dt ob ep e r s o n a l l yi n s o l v e n t . Aso f J a n u a r y3 1 , 2 0 2 1 , t h ef o l l o wi n gt r a n s a c t i o n so c c u r r e d :  No n c a s ha s s e t swi t hab o o kv a l u eP1 , 0 0 0 , 0 0 0we r es o l da t ag a i no f P1 0 0 , 0 0 0 .  L i q u i d a t i o ne x p e n s e sf o rt h emo n t ho f J a n u a r ya mo u n t i n gt oP5 0 , 0 0 0we r ep a i d .  I t i se s t i ma t e dt h a t l i q u i d a t i o ne x p e n s e sa mo u n t i n gt oP1 5 0 , 0 0 0wi l l b ei n c u r r e df o r t h emo n t ho f Fe b r u a r y , 2 0 2 1 .  2 0 %o f t h el i a b i l i t i e st ot h i r dp e r s o n swe r es e t t l e d .  Av a i l a b l ec a s hwe r ed i s t r i b u t e dt ot h ep a r t n e r s . Aso f F e b r u a r y2 8 , 2 0 2 1 , t h ef o l l o wi n gt r a n s a c t i o n so c c u r r e d :  Re ma i n i n gn o n c a s ha s s e t swe r es o l da t al o s so f P1 0 0 , 0 0 0 .  Th efi n a l l i q u i d a t i o ne x p e n s e sf o r t h emo n t ho f Fe b r u a r ya mo u n t e dt oP1 0 0 , 0 0 0 .  Th er e ma i n i n gl i a b i l i t i e st ot h i r dp e r s o n swe r es e t t l e da t ac o mp r o mi s ea mo u n t o f P1 , 5 0 0 , 0 0 0 . Re ma i n i n gc a s hwe r efi n a l l yd i s t r i b u t e dt ot h ep a r t n e r s . 7 . Wh a t i st h ea mo u n t o f c a s hr e c e i v e db yp a r t n e r Co nJ a n u a r y3 1 , 2 0 2 1 ? A.P2 4 0 , 0 0 0 C.P3 0 0 , 0 0 0 B. P2 6 0 , 0 0 0 D.P3 5 0 , 0 0 0 8 . Wh a t i st h es h a r eo f Bi nt h ema x i mu mp o s s i b l el o s so nJ a n u a r y3 1 , 2 0 2 1 ? A.P1 1 0 , 0 0 0 C.P1 6 5 , 0 0 0 B. P1 2 0 , 0 0 0 D.P2 7 5 , 0 0 0 9 . Wh a t i st h ea mo u n t o f t o t a l c a s hwi t h h e l do nJ a n u a r y3 1 , 2 0 2 1 ? A.P5 5 0 , 0 0 0 C.P1 , 7 0 0 , 0 0 0 B. P1 , 6 0 0 , 0 0 0 D.P1 , 7 5 0 , 0 0 0

1 0 . Un d e r I FRS1 5 , wh e r eac o n t r a c t wi t hac u s t o me rh a smu l t i p l ep e r f o r ma n c eo b l i g a t i o n s , wh a t wi l l b et h ea c c o u n t i n g t r e a t me n t t ot h et r a n s a c t i o np r i c e ? A.Th et r a n s a c t i o np r i c es h a l l b ea l l o c a t e de q u a l l yt ot h ed i ff e r e n t p e r f o r ma n c eo b l i g a t i o n s . B. Th et r a n s a c t i o np r i c es h a l l b er e c o g n i z e da sr e v e n u et ot h emo s t i mp o r t a n t p e r f o r ma n c eo b l i g a t i o n . C.Th et r a n s a c t i o np r i c es h a l lb er e c o g n i z e da sr e v e n u eo n l ya tt h ee n do fc o mp l e t i o no fa l lp e r f o r ma n c e o b l i g a t i o n s . D.Th et r a n s a c t i o np r i c es h a l lb ea l l o c a t e dt ot h ed i ff e r e n tp e r f o r ma n c eo b l i g a t i o n sb yr e f e r e n c et ot h e i rr e l a t i v e s t a n d a l o n es e l l i n gp r i c e s . 1 1 . Un d e r I FRS1 5 , wh i c ho f t h ef o l l o wi n gc o s t sc a nb ec a p i t a l i z e da sa na s s e t f o r b e i n gi n c r e me n t a l c o s to f o b t a i n i n ga c o n t r a c t wi t hc u s t o me r ? A.Sa l a r i e so f t h el e g a l c o u n s e l o f t h ee n t i t y . B. Ad v e r t i s i n gc o s t t oc r e a t eg o o d wi l l f o rt h ec o mp a n y . C.Re s e a r c ha n dd e v e l o p me n t c o s t st oc r e a t eag o o dn a mef o r t h ec o mp a n y D.Co s t st h a tt h ee n t i t ywo u l dn o th a v ei n c u r r e di ft h ec o n t r a c th a dn o tb e e ns u c c e s s f u l l yo b t a i n e ds u c ha s s u c c e s sf e e s ’ p a i dt oa g e n t s 1 2 . Un d e rI FRS1 5 ,wh a t s h a l l b ep r e s e n t e db yt h ee n t i t yi ni t ss t a t e me n to f fi n a n c i a l p o s i t i o ni nr e l a t i o nt oi t sc o n t r a c t wi t hac u s t o me rwh e r et h ee n t i t yh a sp e r f o r me db yt r a n s f e r r i n gag o o do rs e r v i c et ot h ec u s t o me ra n dt h ec u s t o me r h a sn o ty e tp a i dt h er e l a t e dc o n s i d e r a t i o na n dt h ee n t i t y ’ sr i g h tt oc o n s i d e r a t i o ni sc o n d i t i o n a l o ns o me t h i n go t h e r t h a nt h ep a s s a g eo f t i me, f o r e x a mp l ef u t u r ep e r f o r ma n c eo f t h ee n t i t y ? A.Co n t r a c t a s s e t C. Co n t r a c t l i a b i l i t y B. Co n t r a c t e q u i t y D. Co n t r a c t r e c e i v a b l e 1 3 . OnOc t o b e r1 , 2 0 2 0 , Ac meF u e l Co . s o l d1 0 0 , 0 0 0g a l l o n so f h e a t i n go i l t oKa r nCo . a t P3p e r g a l l o n . F i f t y t h o u s a n d g a l l o n swe r ed e l i v e r e do nDe c e mb e r1 5 ,2 0 2 0 ,a n dt h er e ma i n i n g5 0 , 0 0 0g a l l o n swe r ed e l i v e r e do nJ a n u a r y1 5 , 2 0 2 1 . Pa y me n t t e r mswe r e5 0 %d u eo nOc t o b e r1 , 2 0 2 0 , 2 5 %d u eo nfi r s t d e l i v e r y , a n dt h er e ma i n i n g2 5 %d u eo n s e c o n dd e l i v e r y . Wh a t a mo u n t o f r e v e n u es h o u l dAc mer e c o g n i z ef r o mt h i ss a l ed u r i n g2 0 2 1 ? A.P7 5 , 0 0 0 C. P2 2 5 , 0 0 0 B. P1 5 0 , 0 0 0 D. P3 0 0 , 0 0 0 1 4 . OnJ u l y1 5 , 2 0 2 1 , Or t i z&Co . s i g n e dac o n t r a c t t op r o v i d eEv e r F r e s hBa k e r ywi t ha ni n g r e d i e n t we i g h i n gs y s t e mf o r ap r i c eo fP9 0 , 0 0 0 .Th es y s t e mi n c l u d e dfi n e l yt u n e ds c a l e st h a tfi ti n t oEv e r F r e s h ’ sa u t o ma t e da s s e mb l yl i n e , Or t i z ’ sp r o p r i e t a r ys o f t wa r emo d i fi e dt oa l l o wt h ewe i g h i n gs y s t e mt of u n c t i o ni nEv e r F r e s h ’ sa u t o ma t e ds y s t e m, a n d ao n e y e a rc o n t r a c tt oc a l i b r a t et h ee q u i p me n ta n ds o f t wa r eo na na s n e e d e db a s i s .( Or t i zc o mp e t e swi t ho t h e r v e n d o r swh oo ff e ro n g o i n gc a l i b r a t i o nc o n t r a c t sf o rOr t i z ’ ss y s t e ms . )I fOr t i zwa st op r o v i d et h e s eg o o d sa n d s e r v i c e ss e p a r a t e l y ,i two u l dc h a r g eP6 0 , 0 0 0f o rt h es c a l e s ,P1 0 , 0 0 0f o rt h es o f t wa r e ,a n dP3 0 , 0 0 0f o rt h e c a l i b r a t i o nc o n t r a c t . Or t i zd e l i v e r e da n di n s t a l l e dt h ee q u i p me n t a n ds o f t wa r eo nAu g u s t 1 , 2 0 2 1 , a n dt h ec a l i b r a t i o n s e r v i c ec o mme n c e do nt h a t d a t e . As s u met h a tt h es c a l e s ,s o f t wa r ea n dc a l i b r a t i o ns e r v i c ea r ev i e we da so n ep e r f o r ma n c eo b l i g a t i o n .Ho w mu c hr e v e n u ewi l l Or t i zr e c o g n i z ei n2 0 2 1f o r t h i sc o n t r a c t ? A.P0 C. P6 3 , 0 0 0 B. P3 7 , 5 0 0 D. P9 0 , 0 0 0

1 5 . Wi l s o nL i n k sPr o d u c t ss e l l sap r o d u c t t h a t i n v o l v e st wos e p a r a t ep e r f o r ma n c eo b l i g a t i o n s : t h eSwi n gRi g h t g o l f c l u b we i g h t a n dt h eSwi n gCo a c ht e a c h i n gs o f t wa r e .Swi n gRi g h t h a sas t a n d a l o n es e l l i n gp r i c eo fP1 5 0 .Wi l s o ns e l l s b o t ht h eSwi n gRi g h ta n dt h eSwi n gCo a c ha sap a c k a g ed e a l f o rP2 0 0 .Th eSwi n g Co a c hs o f t wa r ei sn o ts o l d s e p a r a t e l y . Wi l s o ni sa wa r et h a t o t h e rv e n d o r sc h a r g eP1 0 0f o rs i mi l a rs o f t wa r e , a n dWi l s o n ’ sp r i c e sa r eg e n e r a l l y 1 0 %l o we rt h a nwh a ti sc h a r g e db yt h o s ev e n d o r s .Wi l s o ne s t i ma t e st h a ti ti n c u r sa p p r o x i ma t e l yP6 5o fc o s tp e r c o p yo f t h es o f t wa r e , a n du s u a l l yc h a r g e s5 0 %a b o v ec o s t o ns i mi l a r p r o d u c t s . Es t i ma t et h es t a n d a l o n es e l l i n gp r i c eo f t h es o f t wa r eu s i n gt h ea d j u s t e dma r k e t a s s e s s me n t A.P5 0 C. P9 0 B. P8 0 D. P9 7 . 5 1 6 . Un d e r I AS1 1 , wh i c ho f t h ef o l l o wi n gc o s t ss h a l l f o r mp a r t o f c o n t r a c t c o s t so f l o n g t e r mc o n s t r u c t i o nc o n t r a c t ? A.s e l l i n gc o s t ss u c ha sb r o k e r ’ sc o mmi s s i o n B. g e n e r a l a d mi n i s t r a t i o nc o s t sf o rwh i c hr e i mb u r s e me n t i sn o t s p e c i fi e di nt h ec o n t r a c t C.r e s e a r c ha n dd e v e l o p me n t c o s t sf o rwh i c hr e i mb u r s e me n t i sn o t s p e c i fi e di nt h ec o n t r a c t D.c o n s t r u c t i o no v e r h e a d si n c l u d i n gc o s t ss u c ha st h ep r e p a r a t i o na n dp r o c e s s i n go fc o n s t r u c t i o np e r s o n n e l p a y r o l l OnJ a n u a r y1 , 2 0 2 1 , a ne n t i t ya c c e p t e dal o n g t e r mc o n s t r u c t i o np r o j e c t f o r a ni n i t i a l c o n t r a c t p r i c eo f P1 , 0 0 0 , 0 0 0t o b ec o mp l e t e do nJ u n e3 0 , 2 0 2 3 .OnJ a n u a r y1 , 2 0 2 2 , t h ec o n t r a c t p r i c ewa si n c r e a s e dt oP1 , 5 0 0 , 0 0 0b yr e a s o no f c h a n g ei nt h ed e s i g no ft h ep r o j e c t .Th ep r o j e c twa sc o mp l e t e do nDe c e mb e r3 1 ,2 0 2 3wh i c hr e s u l t e dt op e n a l t y a mo u n t i n gt oP2 0 0 , 0 0 0 . Th ee n t i t yp r o v i d e dt h ef o l l o wi n gd a t ac o n c e r n i n gt h ed i r e c t c o s t sr e l a t e dt ot h es a i dp r o j e c t :

Co s t sd u r i n gt h ey e a r Re ma i n i n ge s t i ma t e dc o s t st o c o mp l e t ea t t h ee n do f t h ey e a r

Y e a r 2 0 2 1 Y e a r 2 0 2 2 Y e a r 2 0 2 3 P4 4 0 , 0 0 0 P6 8 0 , 0 0 0 P1 3 0 , 0 0 0 P6 6 0 , 0 0 0 P2 8 0 , 0 0 0

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Th eo u t c o meo f t h ec o n s t r u c t i o nc o n t r a c t c a nb ee s t i ma t e dr e l i a b l y . 1 7 . Wh a t i st h eb a l a n c eo f c o n s t r u c t i o ni np r o g r e s so nDe c e mb e r3 1 , 2 0 2 2 ? A.P9 0 0 , 0 0 0 C.P1 , 1 2 0 , 0 0 0 D.P1 , 2 0 0 , 0 0 0 B. P1 , 0 2 0 , 0 0 0 1 8 . Wh a t i st h er e a l i z e dg r o s sp r o fi t ( g r o s sl o s s )t ob er e c o g n i z e db yt h ee n t i t yf o rt h ey e a re n d e dDe c e mb e r3 1 , 2 0 2 3 ? A.( P1 2 0 , 0 0 0 ) C.P5 0 , 0 0 0 B. ( P3 0 , 0 0 0 ) D.P1 7 0 , 0 0 0 OnJ a n u a r y1 , 2 0 2 1 , a ne n t i t ys t a r t e dt h ec o n s t r u c t i o no fab u i l d i n ga t afi x e dc o n t r a c tp r i c eo fP1 , 0 0 0 , 0 0 0 . Ont h e s a med a t e , t h ec u s t o me rp a i damo b i l i z a t i o nf e ee q u a l t o5 %o fc o n t r a c tp r i c et h a twi l l b ed e d u c t i b l ef r o mt h efi r s t b i l l i n g . On2 0 1 8 ,t h ee n t i t yb i l l e di t sc u s t o me re q u i v a l e n tt o3 0 %o ft h ec o n t r a c tp r i c e .On2 0 2 2 ,t h ee n t i t yb i l l e da g a i ni t s c u s t o me ra mo u n t i n gt o2 0 %o f t h ec o n t r a c t p r i c e . On2 0 2 3 , t h ee n t i t yb i l l e da g a i ni t sc u s t o me ra mo u n t i n gt o4 0 %o f t h ec o n t r a c t p r i c e . Th er e ma i n i n gb i l l i n gwa sma d ea t t h ey e a ro f c o mp l e t i o no f t h ep r o j e c t . Th ee n t i t yma d ec o l l e c t i o nf r o mt h ec u s t o me ra t t h ee n do fy e a r2 0 2 1 , 2 0 2 2a n d2 0 2 3 , i nt h ea mo u n t o f P1 2 0 , 0 0 0 , P4 5 0 , 0 0 0a n dP1 8 0 , 0 0 0 , r e s p e c t i v e l y .

Th eo u t c o meo f c o n s t r u c t i o nc o n t r a c t c a n n o t b ee s t i ma t e dr e l i a b l y . Th ee n t i t yp r o v i d e dt h ef o l l o wi n gd a t ac o n c e r n i n gt h ed i r e c t c o s t sr e l a t e dt ot h es a i dp r o j e c t : Y e a r 2 0 2 1 Y e a r 2 0 2 2 Y e a r 2 0 2 3 Cu mu l a t i v ec o s t si n c u r r e da so f t h ee n do f t h ey e a rP3 6 0 , 0 0 0 P8 0 0 , 0 0 0 P8 7 0 , 0 0 0 Re ma i n i n ge s t i ma t e dc o s t st oc o mp l e t ea t t h e e n do f t h ey e a r P8 4 0 , 0 0 0 P2 5 0 , 0 0 0 P5 0 , 0 0 0 1 9 Wh a ti st h ee x c e s so fc o n s t r u c t i o ni np r o g r e s so v e rp r o g r e s sb i l l i n g s( p r o g r e s sb i l l i n g so v e rc o n s t r u c t i o ni n p r o g r e s s )o nDe c e mb e r 3 1 , 2 0 2 3 ? A.( P8 0 , 0 0 0 ) C. P2 0 , 0 0 0 B. ( P3 0 , 0 0 0 ) D. P5 0 , 0 0 0 2 0 . Un d e rPFRS1 5 ,h o ws h a l lr e v e n u ef r o mc o n t r a c t swi t hc u s t o me r ss u c ha sr e v e n u ef r o mi n i t i a lf r a n c h i s ef e eb e r e c o g n i z e db yt h ef r a n c h i s o r ? A.Up o nr e c e i p t o f t h ei n i t i a l f r a n c h i s ef e eb yt h ef r a n c h i s o r . B. Up o ns i g n i n go f t h ef r a n c h i s ea g r e e me n t . C.Wh e nt h ef r a n c h i s o rs a t i s fi e st h ep e r f o r ma n c eo b l i g a t i o nu n d e rt h ef r a n c h i s ea g r e e me n t . D.Ap p l y i n gt h el e g a l i t yo v e r t h es u b s t a n c eo f t h et r a n s a c t i o n . 2 1 .PFRS1 5p r o v i d e st h a ti n i t i a l f r a n c h i s ef e es h a l lb er e c o g n i z e da sr e v e n u eo v e rt i me( p e r c e n t a g eo fc o mp l e t i o n me t h o d )i f a n yo n eo ft h ef o l l o wi n gc r i t e r i ap r o v i d e db e l o wi sme t .Wh i c ho ft h ef o l l o wi n gi n d i c a t o rs h o wst h a tt h e i n i t i a l f r a n c h i s ef e es h a l l b er e c o g n i z e da sr e v e n u ea t ap o i n t i nt i mei n s t e a do v e r t i me ? A.Wh e nt h ef r a n c h i s e es i mu l t a n e o u s l yr e c e i v e sa n dc o n s u me st h eb e n e fi t sp r o v i d e db yt h ef r a n c h i s o r ’ s p e r f o r ma n c ea st h ef r a n c h i s o r p e r f o r ms . B. Wh e nt h ef r a n c h i s o r ’ sp e r f o r ma n c ec r e a t e so re n h a n c e sa na s s e t t h a tt h ef r a n c h i s e ec o n t r o l sa st h ea s s e ti s c r e a t e do r e n h a n c e d . C.Wh e nt h ef r a n c h i s o r ’ sp e r f o r ma n c ed o e sn o tc r e a t ea na s s e twi t ha l t e r n a t i v eu s et ot h ef r a n c h i s o ra n dt h e f r a n c h i s o r h a sa ne n f o r c e a b l er i g h t t op a y me n t f o r p e r f o r ma n c ec o mp l e t e dt od a t e . D.Wh e nt h ef r a n c h i s e eh a sl e g a l t i t l et ot h ef r a n c h i s e OnJ a n u a r y1 , 2 0 2 1 , a ne n t i t yg r a n t e daf r a n c h i s et oaf r a n c h i s e e . Th ef r a n c h i s ea g r e e me n t r e q u i r e st h ef r a n c h i s e e t op a yan o n r e f u n d a b l eu p f r o n t f e ei nt h ea mo u n t o f P4 0 0 , 0 0 0a n do n g o i n gp a y me n t o f r o y a l t i e se q u i v a l e n t t o 5 %o f t h es a l e so f t h ef r a n c h i s e e . Th ef r a n c h i s e ep a i dt h en o n r e f u n d a b l eu p f r o n t f e eo nJ a n u a r y1 , 2 0 2 1 . I nr e l a t i o nt ot h en o n r e f u n d a b l eu p f r o n tf e e ,t h ef r a n c h i s ea g r e e me n tr e q u i r e st h ee n t i t yt or e n d e rt h ef o l l o wi n g p e r f o r ma n c eo b l i g a t i o n s :  T oc o n s t r u c t t h ef r a n c h i s e e ’ ss t a l l wi t hs t a n d a l o n es e l l i n gp r i c eo f P2 0 0 , 0 0 0 .  T od e l i v e r 1 0 , 0 0 0u n i t so f r a wma t e r i a l st ot h ef r a n c h i s e ewi t hs t a n d a l o n es e l l i n gp r i c eo f P2 5 0 , 0 0 0 .  T oa l l o wt h ef r a n c h i s e et ou s et h ee n t i t yt r a d e n a mef o rap e r i o do f1 0y e a r ss t a r t i n gJ a n u a r y1 ,2 0 2 1wi t h s t a n d a l o n es e l l i n gp r i c eo f P5 0 , 0 0 0 . OnJ u n e3 0 ,2 0 2 1 ,t h ee n t i t yc o mp l e t e dt h ec o n s t r u c t i o no ft h ef r a n c h i s e e ’ ss t a l l .Aso fDe c e mb e r3 1 ,2 0 2 1 ,t h e e n t i t ywa sa b l et od e l i v e r3 , 0 0 0u n i t so fr a wma t e r i a l st ot h ef r a n c h i s e e .F o rt h ey e a re n d e dDe c e mb e r3 1 , 2 0 2 1 , t h ef r a n c h i s e er e p o r t e ds a l e sr e v e n u ea mo u n t i n gt oP1 0 0 , 0 0 0 . Th ee n t i t yd e t e r mi n e st h a t t h ep e r f o r ma n c eo b l i g a t i o n sa r es e p a r a t ea n dd i s t i n c t f r o mo n ea n o t h e r .

2 2 . Wh a ti st h ea mo u n...