d E18 20 (LO3) (Sales with Returns) Organic Growth Company is presently testing a number of new agricultural seeds that it has recently harvested To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied The right of return extends for 4 months Organic Growth estimates returns of 20 Organic Growth sells these seeds on account for $1,500,000 (cost $750,000) on January 2, 2017 Customers are required to pay the full amount due by March 15, 2017 Instructions (a) Prepare the journal entry for Organic Growth at January 2, 2017 (b) AssumethatonecustomerreturnstheseedsonMarch1,2017,duetounsatisfactoryperformance Preparethejournal entry to record this transaction, assuming this customer purchased $100,000 of seeds from Organic Growth (c) Assume Organic Growth prepares financial statements quarterly Prepare the necessary entries (if any) to adjust Organic Growths financial results for the above transactions on March 31, 2017, assuming remaining expected returns of $200,000

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d E18-20 (LO3) (Sales with Returns) Organic Growth Company is presently testing a number of new agricultural seeds that it has recently harvested. To stimulate

E18-20 (LO3) (Sales with Returns) Organic Growth Company is presently testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Organic Growth estimates returns of 20%. Organic Growth sells these seeds on account for $1,500,000 (cost $750,000) on January 2, 2017. Customers are required to pay the full amount due by March 15, 2017.

Instructions

(a) Prepare the journal entry for Organic Growth at January 2, 2017.
(b) AssumethatonecustomerreturnstheseedsonMarch1,2017,duetounsatisfactoryperformance.Preparethejournal

entry to record this transaction, assuming this customer purchased $100,000 of seeds from Organic Growth.
(c) Assume Organic Growth prepares financial statements quarterly. Prepare the necessary entries (if any) to adjust Organic Growths financial results for the above transactions on March 31, 2017, assuming remaining expected returns of

$200,000.