Dexter purchases equipment from Ray Company for a normal market price of $5,000,000. As an incentive, Ray's salesman throws in free installation as part of the deal. The price of the installation service is estimated to have a fair value of $600,000. Assuming the transaction to be multiple-deliverable arrangement, compute the amount to be allocated to installation. Round your percentage calculations to AT LEAST 4 decimal places.

A) 535,714

B) 600,000

C) 670,200

D) 614,570

Please show work.

When must a company recognize a contract liability on a sale?

		A- When the customer has paid for all of the work performed by company so far.
		B- When the customer has paid in advance of an obligation being completed.
		C- When the company has estimated the actual transaction price of the contract.
		D- When the company has completed work before being paid.