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Problem 8: On January 1, 20x1, Boston Inc., a franchisor entered into a contract with a franchisee for the establishment of a coffee shop. The franchise agreement provides that the franchisee shall pay a non-refundable upfront franchise fee in the amount of PB,000,000 payable at the date of signing of contract. The franchise agreement also provides for the payment of on-going royalties equivalent to 10% of franchisee's revenue. The franchise agreement requires Boston to: (1) To construct the coffee shop; (2) To allow the franchisee to use the Boston's trademark for a period of 20 years from the signing of contract; and (3) To deliver 100,000 units of raw beans for the franchisee's operation. Based on the evaluation of the contract, it is determined that it is covered by PFRS 15: Revenue from Contracts with Customers. It is determined that the franchisee's three performance obligations under the franchise contract are separate performance obligations. Based on frachisor's data, it is established that the stand-alone selling price of: (1) Construction of coffee shop is P5,000,000; (2) License to use Boston trademark is P2,090,000; and (3) Delivery of raw beans is P3,000,000. On January 1, 20*1, the franchisee paid the initial franchise fee. As of December 31, 20x1, Boston Inc. has completed 80% of the coffee shop which already allowed the franchisee to operate. During the said year, Boston Inc. has already delivered 30,000 units of raw beans to the franchisee. For the year ended December 31, 20x1, Boston Inc. reported sales revenue amounting to P500,090. What is the total revenue to be reported by Boston Inc. for the year ended December 31, 20x17 a. P5,050,000 b. P4,050,000 C. P5,730,000 d. P4,530,000