Sandhill Windows manufactures and sells custom storm windows forthree-season porches. Sandhill also provides installation servicefor the windows. The installation process does not involve changesin the windows, so this service can be performed by other vendors.Sandhill enters into the following contract on July 1, 2017, with alocal homeowner. The customer purchases windows for a price of$2,340 and chooses Sandhill to do the installation. Sandhillcharges the same price for the windows irrespective of whether itdoes the installation or not. The customer pays Sandhill $1,960(which equals the standalone selling price of the windows, whichhave a cost of $1,100) upon delivery and the remaining balance uponinstallation of the windows. The windows are delivered on September1, 2017, Sandhill completes installation on October 15, 2017, andthe customer pays the balance due.
1. Sandhill estimates the standalone selling price of theinstallation based on an estimated cost of $410 plus a margin of20% on cost.
Prepare the journal entries for Sandhill in 2017. (Creditaccount titles are automatically indented when the amount isentered. Do not indent manually. If no entry is required, select"No entry" for the account titles and enter 0 for the amounts.Round answer to 0 decimal places, e.g. 5,125.)
2. Given uncertainty of finding skilled labor, Sandhill isunable to develop a reliable estimate for the standalone sellingprice of the installation.
Prepare the journal entries for Sandhill in 2017.
