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hurry plz On January 1, 200, Pharon Ltd, sold on account 1,400 units of its product for a total price of S569,000 that included a
hurry plz
On January 1, 200, Pharon Ltd, sold on account 1,400 units of its product for a total price of S569,000 that included a one-year warranty that the products would be free of any defects for the period ending December 31, 2020. For the one your assurance-type warranty, Pharoah estimated on January 1" that the cost of repairs would be $23,600. By the company's year-end, December 31, 2020, actual warranty costs of $20,000 were incurred and paid in cash. In addition, on January 1, 2020, the company sold extended warranties related to 600 units for a one-year period beyond the one-year assurance period at a price of $15,100. By the company's year-end, December 31, 2021, 58,145 of warranty costs were incurred and paid in cash. Instructions (show details of all calculations) a. How much is the total warranty expense that will be included on Pharoah's financial statements for 2020? (1 mark) b. Prepare the appropriate journal entry for 2020 for the service type warranty (that is, for the extended warranty). (Note: you do not need to provide any journal entries for the assurance warranty or the sale of 1,400 units on account). (2 marks) c. Prepare the appropriate journal entries for 2021 for the extended warranty. (4 marks) Step by Step Solution
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