On December 1, 20X1, CANOROUS Co. granted a 5-year franchise to MELODIOUS, Inc. for an initial franchise fee of P 400,000 and a 10% sales-based royalty. The initial franchise fee is non-refundable and...

On December 1, 20X1, CANOROUS Co. granted a 5-year franchise to MELODIOUS, Inc. for an initial franchise fee of P 400,000 and a 10% sales-based royalty. The initial franchise fee is non-refundable and due upon signing of the contract. At contract inception, CANOROUS determines that the nature of its promise to grant the license is to provide the customer with the right to access CANOROUS' intellectual property as it exists throughout the license period. As of December 31, 20X1, CANOROUS has no remaining obligation or intent to refund any of the cash received, all the initial services necessary to setup the contract have been performed, and MELODIOUS started operating the franchised business. MELODIOUS reported sales of P 800,000 for 20X1. How much revenue shall CANOROUS recognize in 20X1? (Round off your answer to the nearest peso.)