Company prepares monthly financial statements. Company sells precision equipment. They also sell service agreements for calibrating precision equipment (both to their customers and the public). MachineXnormally sells for $54,000. A 12-month agreement to calibratethe equipment on a monthly basis normally sells for $6,000 ($500 per month). This content is copyrighted

• In January Company sells a customer a package that includes MachineXand the calibration agreement. The total contract price is$48,000.
• The equipment is delivered to the customer in January.
• The calibration services will be provided over 12 months beginning in February.

There are 2 performance obligations in this package, the equipment sale and the calibration agreement.

1. What amount is allocated to the equipment sale performance obligation?
2. What amount is allocated to the calibration agreement performance obligation?
3. How much revenue is recognized in January related to this customer's contract? (Ignore any expenses- this is about the revenue only)
4. How much revenue is recognized in Februaryrelated to this customer's contract? (Ignore any expenses- this is about the revenue only)