Earth Sciences homework help

Periwinkle Company manufactures equipment. Periwinkle’s products range formsimple automated machinery to complex systems containing numerouscomponents. Unit selling prices range from $140,000 to $1,200,000 and are quotedinclusive of installation. The installation process does NOT involve changes to thefeatures of the equipment to perform specifications. Periwinkle has the followingrelationship with Rose Inc.• Rose can purchase equipment from Periwinkle for a price of $200,000 andcontracts with Periwinkle to install the equipment. Using market data, Rosedetermines installation service is estimated to have a fair value of $20,000. Thecost of the equipment is $78,000.• Rose is obligated to pay Periwinkle the $200,000 upon delivery and installationof the equipment.Periwinkle delivers the equipment on August 1, 2017, and completes the installationof the equipment on October 1, 2017. The equipment has a useful life of 7 years.Assume the equipment and the installations are two distinct performanceobligations that should be accounted for separately.Required:a) How should the transaction price of $200,000 be allocated among the serviceobligations?b) Prepare the journal entries for Periwinkle for this revenue arrangement for2017, assuming Periwinkle receives payment when installation is completed