On June 1, 2020, Cheyenne sold 90 washer/dryer units without installation to Laplante Rentals for $63,900. Laplante is a newercustomer and is unsure how this product will work in its older rental units. Cheyenne offers a 60-day return privilege andestimates, based on prior experience with sales on this product, 4% of the units will be returned. Prepare the journal entries forthe sale and related cost of goods sold on June 1, 2020. (Credit account titles are automatically indented when the amount isentered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.)Account Titles and ExplanationDebitCredit(To record sales)(To record cost of goods sold) Cheyenne Appliance Co. manufactures low-price, no-frills appliances that are in great demand for rental units. Pricing and costinformation on Cheyenne's main products are as follows.StandaloneItemSelling Price (Cost)Refrigerator$510($260 )Range570(280 )Stackable washer/dryer unit710(390 )Customers can contract to purchase either individually at the stated prices or a three-item bundle with a price of $1,830. The bundleprice includes delivery and installation. Cheyenne also provides installation (not a separate performance obligation).Respond to the requirements related to the following independent revenue arrangements for Cheyenne Appliance Co.

Answered: On June 1, 2020, Cheyenne sold 90…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 19E: Rix Company sells home appliances and provides installation and service for its customers. On April...

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On June 1, 2020, Cheyenne sold 90 washer/dryer units without installation to Laplante Rentals for $63,900. Laplante is a newer
customer and is unsure how this product will work in its older rental units. Cheyenne offers a 60-day return privilege and
estimates, based on prior experience with sales on this product, 4% of the units will be returned. Prepare the journal entries for
the sale and related cost of goods sold on June 1, 2020. (Credit account titles are automatically indented when the amount is
entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation
Debit
Credit
(To record sales)
(To record cost of goods sold)

Cheyenne Appliance Co. manufactures low-price, no-frills appliances that are in great demand for rental units. Pricing and cost
information on Cheyenne's main products are as follows.
Standalone
Item
Selling Price (Cost)
Refrigerator
$510
($260 )
Range
570
(280 )
Stackable washer/dryer unit
710
(390 )
Customers can contract to purchase either individually at the stated prices or a three-item bundle with a price of $1,830. The bundle
price includes delivery and installation. Cheyenne also provides installation (not a separate performance obligation).
Respond to the requirements related to the following independent revenue arrangements for Cheyenne Appliance Co.

Expert Solution

Step 1

Inventory-

The word inventory refers to the raw materials used in manufacture as well as the goods produced that are presented for sale. A company's inventory represents one of the most essential assets it has because the turnover of inventory represents one of the prime sources of profits generation and subsequent income for the company's shareholders. There are three types of inventory, as well as raw materials, work-in-progress, and finished goods. It is characterized as a current asset on a company's balance sheet.

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