Pharoah Company sold 10,500 Super-Spreaders on December 31, 2025, at a total price of $987,000, with a warranty guarantee that the product was free of any defects. The cost of the spreaders sold is $588,000. The assurance warranties extend for a 2-year period and are estimated to cost $38,600. Pharoah also sold extended warranties (service-type warranties) related to 2,000 spreaders for 2 years beyond the 2-year period for $12,000. Given this information, determine the amounts to report for the following at December 31, 2025: sales revenue, warranty expense, unearned warranty revenue, warranty liability, and cash. Amounts Reported in Income

Pharoah Company sold 10,500 Super-Spreaders on December 31, 2025, at a total price of $987,000, with a warranty guarantee that the product was free of any defects. The cost of the spreaders sold is $588,000. The assurance warranties extend for a 2-year period and are estimated to cost $38,600. Pharoah also sold extended warranties (service-type warranties) related to 2,000 spreaders for 2 years beyond the 2-year period for $12,000. Given this information, determine the amounts to report for the following at December 31, 2025: sales revenue, warranty expense, unearned warranty revenue, warranty liability, and cash. Amounts Reported in Income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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