What was the effect on earnings per share of these sales to franchisees? 

BV charges franchisees various fees and discloses them in a somewhat confusing manner. The income statement shows, in revenues: 

 

Royalties and other fees  $8,142,000 

However, Note 1 to the financial statements lists: 

Royalties and other fees  $7,590,000 

Area Development fees 550,000 

Initial franchise fees     2,415,000 

The first two items total to the income statement amount, the third seems to be buried, inexplicably, in rental revenues. 

What was the effect on 1988 earnings per share, of the non-recurring items: area development fees and initial franchise fees? 

What would BV's 1988 earnings per share be after all of the adjustments? 

Ignoring , what would BV's 1988 earnings per share be after the above adjustments? 

What would BV's Price/Earnings ratio be, given all of the above adjustments? 

Answer rating: 100% (QA)

The effect on 1988 earnings per share of the nonrecurring items area development fees and initial fr... View the full answer