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Sandhill Company manufactures equipment. Sandhill's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $400,000 to $1,500,000

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Sandhill Company manufactures equipment. Sandhill's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $400,000 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. Sandhill has the following arrangement with Clinton Inc. - Clinton purchases equipment from Sandhill for a price of $1,080,000 and contracts with Sandhill to install the equipment. Sandhill charges the same price for the equipment irrespective of whether it does the installation or not. The cost of the equipment is $559,000. - Clinton is obligated to pay Sandhill the $1,080,000 upon the delivery and installation of the equipment. Sandhill delivers the equipment on June 1, 2025, and completes the installation of the equipment on September 30, 2025. 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. Assume Sandhill 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 intallation is $34,300; Sandhill prices these services with a 30% margin relative to cost. How should the transaction price of $1,080,000 be allocated among the service obligations? (Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,275.) Equipment $ Installation Prepare the journal entries for Sandhill for this revenue arrangement in 2025 assuming Sandhill receives payment when installation is completed. (List all debit entries before credit entries. Credit account titles are outomatically indented when the amount is entered, Do not indent monualiy. If no entry is required, select "No Entry" for the occount titles and enter of for the amounts. Round final answers to 0 decimal places, es. 5,275. Recond journal entries in the order presented in the problem.)

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