Problem 3-5 Combining multiple contracts (LO3-2, LO3-3, LO3-4) Panarin Company entered into two contracts on the same date with Hjalmarsson Corporation. Panarin has provided the following analysis of price and cost for the contracts: Hjalmarsson, the customer, may cancel both contracts if either of them is not fulfilled by Panarin in a timely manner. Stand-alone prices are typically $120,000 for the goods in Contract A and $80,000 for the goods in Contract B. Required: 1. Should the two contracts be combined for purposes of applying the five-step revenue recognition model? 2. What amount of revenue should Panarin associate with each of the contracts? 3. When should revenue be recognized on each of the contracts