Sheridan Company manufactures equipment. Sheridans products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $280,000 to $1,650,000, and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment to perform to specifications. Sheridan has the following arrangement with Winkerbean Inc.

		Winkerbean purchases equipment from Sheridan on May 2, 2020, for a price of $1,008,000 and contracts with Sheridan to install the equipment. Sheridan charges the same price for the equipment irrespective of whether it does the installation or not. Sheridan determines that the installation service is estimated to have a fair value of $42,000. The cost of the equipment is $600,000.
		Winkerbean is obligated to pay Sheridan the $966,000 upon delivery of the equipment and the balance on the completion of the installation

Sheridan 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. Sheridan 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 $33,600; Sheridan prices these services with a 25% margin relative to cost.

Your answer is partially correct. Prepare any journal entries for Sheridan on May 2, June 1, and September 30, 2020. (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 entero for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit May 2, 2020 Accounts Receivable 967680 Unearned Revenue June 1, 2020 Accounts Receivable 967680 Unearned 40320 Sales Revenue (To record sales) June 1, 2020 Cash 966000 Accounts Receivable (To record cost of goods sold) Cost of Goods Sold September 30, 2020 600000 Inventory e Textbook and Media List of Accounts