Oriole Company manufactures equipment. Orioles products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $235,000 to $1,620,000, and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment to perform to specifications. Oriole has the following arrangement with Winkerbean Inc.

		Winkerbean purchases equipment from Oriole on May 2, 2020, for a price of $1,080,000 and contracts with Oriole to install the equipment. Oriole charges the same price for the equipment irrespective of whether it does the installation or not. Oriole determines that the installation service is estimated to have a fair value of $59,000. The cost of the equipment is $600,000.
		Winkerbean is obligated to pay Oriole the $1,021,000 upon delivery of the equipment and the balance on the completion of the installation

Oriole delivers the equipment on June 1, 2020, and completes the installation of the equipment on September 30, 2020. Assume that the equipment and the installation are two distinct performance obligations that should be accounted for separately. Oriole does not have market data with which to determine the stand-alone selling price of the installation services. As a result, an expected cost plus margin approach is used. The cost of installation is $37,500; Oriole prices these services with a 20% margin relative to cost.

Allocate the transaction price of $1,080,000 among the performance obligations of the contract? Assume Oriole follows IFRS.

Delivery equipment $_____

Installation $________

Prepare any journal entries for Oriole on May 2, June 1, and September 30, 2020.

Date	Account Titles and Explanation	Debit	Credit
	(To record sales)
	(To record cost of goods sold)