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Pharoah Factory provides a 2-year warranty with one of its products which was first sold in 2025. Pharoah sold $1,022,800 of products subject to the warranty. Pharoah expects $119,130 of warranty costs over the next 2 years. In that year, Pharoah spent $63,630 servicing warranty claims. Prepare Pharoah's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date During 2025 Account Titles and Explanation Cash Sales Revenue (To record payment for warranty costs incurred) Warranty Expense Inventory Debit 1022800 63630 Credit 1022800 63630

Pharoah Factory provides a 2-year warranty with one of its products which was first sold in 2025. Pharoah sold $1,022,800 of products subject to the warranty. Pharoah expects $119,130 of warranty costs over the next 2 years. In that year, Pharoah spent $63,630 servicing warranty claims. Prepare Pharoah's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date During 2025 Account Titles and Explanation Cash Sales Revenue (To record payment for warranty costs incurred) Warranty Expense Inventory Debit 1022800 63630 Credit 1022800 63630

FINANCIAL ACCOUNTING
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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Pharoah Factory provides a 2-year warranty with one of its products which was first sold in 2025. Pharoah sold $1,022,800 of products subject to the warranty. Pharoah expects $119,130 of warranty costs over the next 2 years. In that year, Pharoah spent $63,630 servicing warranty claims. Prepare Pharoah's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date During 2025 Account Titles and Explanation Cash Sales Revenue (To record payment for warranty costs incurred) Warranty Expense Inventory Debit 1022800 63630 Credit DO E 1022800 63630
Transcribed Image Text:Pharoah Factory provides a 2-year warranty with one of its products which was first sold in 2025. Pharoah sold $1,022,800 of products subject to the warranty. Pharoah expects $119,130 of warranty costs over the next 2 years. In that year, Pharoah spent $63,630 servicing warranty claims. Prepare Pharoah's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date During 2025 Account Titles and Explanation Cash Sales Revenue (To record payment for warranty costs incurred) Warranty Expense Inventory Debit 1022800 63630 Credit DO E 1022800 63630
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