(a) How should the transaction price of $ 1,100,000 be allocated among the service obligations? (Do not round intermediate calculations. Round final answers to 0 decimal places.) Equipment %24 Installation %24
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- Pharoah Company manufactures equipment. Pharoah’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. Pharoah has the following arrangement with Winkerbean Inc. ● Winkerbean purchases equipment from Pharoah for a price of $960,000 and contracts with Pharoah to install the equipment. Pharoah charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Pharoah determines installation service is estimated to have a standalone selling price of $51,000. The cost of the equipment is $570,000. ● Winkerbean is obligated to pay Pharoah the $960,000 upon the delivery and…Pronghorn Company manufactures equipment. Pronghorn’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. Pronghorn has the following arrangement with Winkerbean Inc. ● Winkerbean purchases equipment from Pronghorn for a price of $1,070,000 and contracts with Pronghorn to install the equipment. Pronghorn charges the same price for the equipment irrespective of whether it does the installation or not. The cost of the equipment is $599,000. ● Winkerbean is obligated to pay Pronghorn the $1,070,000 upon the delivery and installation of the equipment. Pronghorn delivers the equipment on June 1, 2020, and completes the…Crankshaft Company manufactures equipment. Crankshaft'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. Crankshaft has the following arrangement with Winkerbean Inc. Winkerbean purchases equipment from Crankshaft for a price of $1,000,000 and contracts with Crankshaft to install the equipment. Crankshaft charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Crankshaft determines installation service is estimated to have a standalone selling price of $50,000. The cost of the equipment is $600,000. Winkerbean is obligated to pay Crankshaft the $1,000,000 upon the delivery…
- Headland Company manufactures equipment. Headland'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. Headland has the following arrangement with Winkerbean Inc. Winkerbean purchases equipment from Headland for a price of $1,040,000 and contracts with Headland to install the equipment. Headland charges the same price for the equipment irrespective of whether it does the installation or not. The cost of the equipment is $620,000. Winkerbean is obligated to pay Headland the $1,040,000 upon the delivery and installation of the equipment. Headland delivers the equipment on June 1, 2020, and completes the installation of the equipment on…Culver Company manufactures equipment. Culver’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. Culver has the following arrangement with Winkerbean Inc. ● Winkerbean purchases equipment from Culver for a price of $1,040,000 and contracts with Culver to install the equipment. Culver charges the same price for the equipment irrespective of whether it does the installation or not. The cost of the equipment is $581,000. ● Winkerbean is obligated to pay Culver the $1,040,000 upon the delivery and installation of the equipment. Culver delivers the equipment on June 1, 2020, and completes the installation of the equipment…Wildhorse Company manufactures equipment. Wildhorse’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. Wildhorse has the following arrangement with Winkerbean Inc. ● Winkerbean purchases equipment from Wildhorse for a price of $940,000 and contracts with Wildhorse to install the equipment. Wildhorse charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Wildhorse determines installation service is estimated to have a standalone selling price of $49,000. The cost of the equipment is $600,000. ● Winkerbean is obligated to pay Wildhorse the $940,000 upon the…
- Concord Company manufactures equipment. Concord’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. Concord has the following arrangement with Winkerbean Inc. ● Winkerbean purchases equipment from Concord for a price of $960,000 and contracts with Concord to install the equipment. Concord charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Concord determines installation service is estimated to have a standalone selling price of $47,000. The cost of the equipment is $550,000. ● Winkerbean is obligated to pay Concord the $960,000 upon the delivery and…Concord Company manufactures equipment. Concord’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. Concord has the following arrangement with Winkerbean Inc. ● Winkerbean purchases equipment from Concord for a price of $960,000 and contracts with Concord to install the equipment. Concord charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Concord determines installation service is estimated to have a standalone selling price of $47,000. The cost of the equipment is $550,000. ● Winkerbean is obligated to pay Concord the $960,000 upon the delivery and…Sweet Company manufactures equipment. Sweet’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. Sweet has the following arrangement with Winkerbean Inc. ● Winkerbean purchases equipment from Sweet for a price of $930,000 and contracts with Sweet to install the equipment. Sweet charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Sweet determines installation service is estimated to have a standalone selling price of $46,000. The cost of the equipment is $560,000. ● Winkerbean is obligated to pay Sweet the $930,000 upon the delivery and installation of the…
- Kingbird Company manufactures equipment. Kingbird’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. Kingbird has the following arrangement with Henderson Inc. ● Henderson purchases equipment from Kingbird for a price of $1,090,000 and contracts with Kingbird to install the equipment. Kingbird charges the same price for the equipment irrespective of whether it does the installation or not. The cost of the equipment is $615,000. ● Henderson is obligated to pay Kingbird the $1,090,000 upon the delivery and installation of the equipment. Kingbird delivers the equipment on June 1, 2020, and completes the installation of…Oriole Company manufactures equipment. Oriole'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. Oriole has the following arrangement with Henderson Inc. Henderson purchases equipment from Oriole for a price of $1,020,000 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. The cost of the equipment is $643,00o. Henderson is obligated to pay Oriole the $1,020,000 upon the delivery and installation of the equipment. Oriole delivers the equipment on June 1, 2020, and completes the installation of the equipment on September 30, 2020.…Current Attempt in Progress Riverbed Company manufactures equipment. Riverbed'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. Riverbed has the following arrangement with Winkerbean Inc. Winkerbean purchases equipment from Riverbed for a price of $ 1,100,000 and contracts with Riverbed to install the equipment. Riverbed charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Riverbed determines installation service is estimated to have a standalone selling price of $ 46,000. The cost of the equipment is $580,000. Winkerbean is obligated to pay Riverbed the $ 1,100,000…