(Solution) - The Rain Soft Water Company distributes its water softeners to d -(2025 Original AI-Free Solution)

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The Rain-Soft Water Company distributes its water softeners to dealers upon their request. The contract agreement with the dealers is that they may have 90 days to sell and pay for the softeners. Until the 90-day period is over, any softeners may be returned at the dealer?s expense and with no further obligation on the dealer?s part. If the water softeners are damaged while in the hands of a dealer, Rain-Soft agrees to accept the return of the damaged softeners with no obligation to the dealer. Past experience indicates that 75% of all softeners distributed on this basis are sold by the dealer. In June, 100 units are delivered to dealers at an average billed price of $800 each. The average cost of the softeners to Rain-Soft is $600. Based on the expected sales, Rain-Soft reports profit of $15,000. You are asked to evaluate the income statement for its compliance with GAAP. What recommendations would you make?