Exercise 18-14 Marin Company manufactures equipment. Marin's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $200,000 to $1,500,000 and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform to specifications. Marin has the following arrangement with Winkerbean Inc. Winkerbean purchases equipment from Marin for a price of $1,020,000 and contracts with Marin to install the equipment. Marin charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Marin determines installation service is estimated to have a standalone selling price of $45,200. The cost of the equipment is $654,000. Winkerbean is obligated to pay Marin the $1,020,000 upon the delivery and installation of the equipment. Marin delivers the equipment on June 1, 2017, and completes the installation of the equipment on September 30, 2017. The equipment has a useful life of 10 years. Assume that the equipment and the installation are two distinct performance obligations which should be accounted for separately. Assuming Marin does not have market data with which to determine the standalone selling price of the installation services. As a result, an expected cost plus margin approach is used. The cost of installation is $33,500; Marin prices these services with a 25% margin relative to cost. * Your answer is incorrect. Try again. How should the transaction price of $1,020,000 be allocated among the service obligations? (Do not round intermediate calculations. Round final answers to o decimal places.) X Equipment 976718 Installation 43282 Prepare the journal entries for Marin for this revenue arrangement on June 1, 2017, assuming Marin receives payment when installation is completed. (Credit account titles are automatically indented when the amount is entered. Do not indent manu 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 Taccounts Receivable IT 10200001T Unearned Service Revenue 976718 Sales Revenue U t 432682 (To record sales) Cost of Goods Sold Inventory (To record cost of goods sold) Unearned Service Revenue Service Revenue 43282 (To record service revenue) Cash 1020000 1102000) 77 7 Accounts Receivable 1020000