Question
Pharoah Company sells goods that cost $295,000 to Ricard Company for $446,000 on January 2, 2017. The sales price includes an installation fee, which has
Pharoah Company sells goods that cost $295,000 to Ricard Company for $446,000 on January 2, 2017. The sales price includes an installation fee, which has a standalone selling price of $42,000. The standalone selling price of the goods is $404,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete.
(a) Prepare the journal entry (if any) to record the sale on January 2, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
Date | Account Titles | Debit | Credit |
Jan 2, 2017 | Accounts Receivable | 446000 | |
Sales Revenue | 404000 | ||
Unearned Service Revenue | 42000 | ||
Jan 2, 2017 | Cost of Goods Sold | 295000 | |
???? | 295000 |
(b) Pharoah prepares an income statement for the first quarter of 2017, ending on March 31, 2017 (installation was completed on June 18, 2017). How much revenue should Pharoah recognize related to its sale to Ricard?
First | Quarter |
Sales Revenue | 404,000 |
Cost of Goods Sold | ???? |
Gross Profit | ???? |
List of Accounts:
Accounts Receivable Accounts Payable Advertising Expense Allowance for Sales Returns and Allowances Billings on Construction in Process Cash Cash, Parts, Labor Commission Expense Commission Revenue Construction in Process Construction Expenses Contract Asset Contract Liability Cost of Goods Sold Cost of Installment Sales Deferred Gross Profit Delivery Expense Discount on Notes Receivable Estimated Inventory Returns Finished Goods Inventory Franchise Revenue Freight- Out Gain on Repossession Income Summary Installment Accounts Receivable Installment Sales Revenue Interest Expense Interest Revenue Inventory Inventory on Consignment Liability to Bonus Point Customers Liability to Enyart Company Liability to Werner Metal Company License Revenue Loss from Long-Term Contracts Loss on Repossession Materials, Cash, Payables No Entry Notes Receivable Operating Expenses Payable to Consignor Purchases Realized Gross Profit Repossessed Merchandise Retained Earnings Returned Inventory Revenue from Consignment Sales Revenue from Franchise Fees Revenue from Long-Term Contracts Sales Discounts Sales Discounts Forfeited Sales Returns and Allowances Sales Revenue Service Revenue Unearned Franchise Revenue Unearned Sales Revenue Unearned Service Revenue Unearned Warranty Revenue Warranty Expense Warranty Liability
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