2 Section 3 Date 4567 8 9 10 11 12 13 14 15 16 STRANK 21...

 

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2 Section 3 Date 4567 8 9 10 11 12 13 14 15 16 STRANK 21 22 23 Pharoah Inc. sells storage buildings of various sizes to homeowners and businesses. Respond to the requirements related to the following independent revenue arrangements for Pharoah products and services. Pharoah offers a storage building R400, mainly to homeowners. Pharoah will also install the building for the customer. The price for Pharoah to deliver and install an R400 is $5,600. On a standalone basis, the building sells for $5,400 (cost $3,300), and Pharoah estimates that the standalone selling price of the installation service (based on cost-plus estimation) is $500. (The selling of the building and the installation services are considered two performance obligations.) Pharoah signed 17 contracts to deliver and install R400s on April 5, 2019. Cash was received from the customer on April 5. The buildings were delivered and installed during May 15, 2019. Instructions (a) How should the transaction price be allocated among the service obligations? (b) Prepare journal entries for Pharoah for R400 on April 5 and May 15, 2019. Date Account Titles Prob #2 Held to Maturity Type here to search Prob #3 Sales with Returns O j nebil Credit Prob #4 Standalone Sales 0.4 10% Prob # a 2 Section 3 Date 4567 8 9 10 11 12 13 14 15 16 STRANK 21 22 23 Pharoah Inc. sells storage buildings of various sizes to homeowners and businesses. Respond to the requirements related to the following independent revenue arrangements for Pharoah products and services. Pharoah offers a storage building R400, mainly to homeowners. Pharoah will also install the building for the customer. The price for Pharoah to deliver and install an R400 is $5,600. On a standalone basis, the building sells for $5,400 (cost $3,300), and Pharoah estimates that the standalone selling price of the installation service (based on cost-plus estimation) is $500. (The selling of the building and the installation services are considered two performance obligations.) Pharoah signed 17 contracts to deliver and install R400s on April 5, 2019. Cash was received from the customer on April 5. The buildings were delivered and installed during May 15, 2019. Instructions (a) How should the transaction price be allocated among the service obligations? (b) Prepare journal entries for Pharoah for R400 on April 5 and May 15, 2019. Date Account Titles Prob #2 Held to Maturity Type here to search Prob #3 Sales with Returns O j nebil Credit Prob #4 Standalone Sales 0.4 10% Prob # a

Answer rating: 100% (QA)

ANSWER a Transaction price 5600 Total standalone price 5400 500 590... View the full answer