Teal Company manufactures equipment Teals 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 Teal has the following arrangement with Winkerbean Inc Winkerbean purchases equipment from Teal for a price of $1,070,000 and contracts with Teal to install the equipment Teal charges the same price for the equipment irrespective of whether it does the installation or not Using market data, Teal determines installation service is estimated to have a standalone selling price of $46,000 The cost of the equipment is $600,000 Winkerbean is obligated to pay Teal the $1,070,000 upon the delivery and installation of the equipment Teal 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 How should the transaction price of $1,070,000 be allocated among the service obligations (Do not round intermediate calculations Round final answers to 0 decimal places ) Equipment $ Installation $ Prepare the journal entries for Teal for this revenue arrangement on June 1, 2017 and September 30, 2017, assuming Teal 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 0 for the amounts ) Date Account Titles and Explanation Debit Credit Jun 1, 2017Sep 30, 2017 (To record sales) (To record cost of goods sold) Jun 1, 2017Sep 30, 2017 (To record service revenue) (To record payment received)

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Teal Company manufactures equipment. Teals products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $200,000 to $1,500,000

Teal Company manufactures equipment. Teals 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. Teal has the following arrangement with Winkerbean Inc.

?		Winkerbean purchases equipment from Teal for a price of $1,070,000 and contracts with Teal to install the equipment. Teal charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Teal determines installation service is estimated to have a standalone selling price of $46,000. The cost of the equipment is $600,000.
?		Winkerbean is obligated to pay Teal the $1,070,000 upon the delivery and installation of the equipment.

Teal 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.

How should the transaction price of $1,070,000 be allocated among the service obligations? (Do not round intermediate calculations. Round final answers to 0 decimal places.)

Equipment		$
Installation		$

Prepare the journal entries for Teal for this revenue arrangement on June 1, 2017 and September 30, 2017, assuming Teal 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 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Jun. 1, 2017Sep. 30, 2017


	(To record sales)


	(To record cost of goods sold)
Jun. 1, 2017Sep. 30, 2017

	(To record service revenue)


	(To record payment received)