Problem 18-4 Page 1 of 3 Print by: GUILLERMINA LORENZO 335.D301.Spring 2018·Seda

Question

Problem 18-4 Page 1 of 3 Print by: GUILLERMINA LORENZO 335.D301.Spring 2018·Seda / ? 18 *Problem 18-4 Pharoah Appliance Co. manufactures low-price, nofrills appliances that are in great demand for rental units. Pricing and cost information on Pharoah's main products are as follows. Standalone Selling Price (Cost) Item Refrigerator Range Stackable washer/dryer unit $490 ($260) (270) (400 ) 570 700 n contract to purchase either individually at the stated prices or a three-item bundle with of $1,800. The bundle price includes delivery and installation. Pharoah also provides installation a price (not a separate performance obligation). Respond to the requirements related to the following independent revenue arrangements for Pharoah Appliance Co. On June 1, 2017, Pharoah sold 90 washer/dryer units without installation to Laplante Rentals for $63,000. Laplante is a newer customer and is unsure how this product will work in its older rental units. Pharoah offers a 60-day return privilege and estimates, based on prior experience with sales on this product 4% of the units will be returned. Prepare the ournal entries for the sale and related cost of goods sold on June 1, 2017. (Credit account tities are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Debit Credit Account Titles and Explanation To record sales) remrd rst of goods sold) t anartment buildings. On May 1, 2017, Pharoah d in one of its

Explanation / Answer

Journal Entry for sale of goods Date Account Titles and Explnations Debit Credit 1st June 2017 Cash / Bank A/c ----------------- Dr 63000 TO Sales Account 63000 (Being goods sold to laplante Rentals for cash/Bank) No entry is required for related cost of goods sold

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