Part A

Equipment 1,035,328 is incorrect

Installation 44,672 is incorrect

Anything boxed in red is incorrect

sents 043/1 Question 9 View Policies Show Attempt History Current Attempt in Progress unting dates Carla Company manufactures equipment. Carla'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. Carla has the following arrangement with Winkerbean Inc. excel Access JS Support es for Success Winkerbean purchases equipment from Carla for a price of $1,080,000 and contracts with Carla to install the equipment, Carla charges the same price for the equipment irrespective of whether it does the Installation or not. Using market data, Carla determines installation service is estimated to have a standalone selling price of $46.600. The cost of the equipment is $651,000. Winkerbean is obligated to pay Carla the $1,000,000 upon the delivery and installation of the equipment. Carla delivers the equipment on June 1, 2020, and completes the installation of the equipment on September 30, 2020. 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 Carla 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 $34.000: Carla prices these services with a 30% margin relative to cost X Your answer is incorrect. How should the transaction price of $1,080,000 be allocated among the service obligations? (Do not round intermediate calculations Round final answers to decimal places.) Equipment $ Installation $ 1035328 44672 e Textbook and Media List of Accounts Save for Later Attempts: unlimited Submit Answer Your answer is partially correct. - Prepare the journal entries for Carla for this revenue arrangement on June 1, 2020, assuming Carla receives payment when installation is completed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required select "No entry for the account titles and enter for the amounts.) Credit Debit Account Titles and Explanation Accounts Receivable 1000000 1035328 Sales Revenue 4672 Uncared Service Revenue (To record sales) Cost of Goods Sold 651000 Inventory (To record cost of goods sold) Unearned Service Revenue Service Revenue (To record service revenue) Accounts Receivable (To record payment received) A4000