Question 1

Organic Growth Company sells plant seed products. As part of a promotion, The company grants unconditional returns to its five main customers for the product considered unsatisfactory. The right to return is valid for four months. Past experience Organic Growth shows that the normal rate of return is 20% (company using the allowance method). Organic Growth sells the seeds on credit of $ 1,500,000 (at a cost of $ 750,000) on January 2, 2019. Customers are required pay the amount due by March 15, 2019. Instructions: a. Keep the journal necessary for Organic Growth on January 2, 2019! b. Assume that one customer returns seeds on March 1, 2019 due to poor performance. Keep a journal to record these transactions, if customers buy $ 100,000 worth of seeds from Organic Growth! (customer yet pay off these receivables). c. Assume that Organic Growth prepares quarterly financial reports. Make it up entries required (if any) to adjust for the above transaction as of March 31 2019, assuming that the expected return is $ 200,000. 

Question 2

PT Teknologi Makmur Jaya (PT TMJ) sells high-tech equipment used by big companies. The selling price is determined by agreement with the customer. Products sold include installation and maintenance services. The installation process is not involves changing features of the equipment and does not require owner information regarding the equipment to perform the installation. PT TMJ entered into an agreement with PT DEF as follows:  PT DEF purchased equipment from PT TMJ for $ 6,000,000 including installation and maintenance (cost of equipment was $ 1,000,000). PT TMJ sells with the same price with or without installation (some companies do the installation itself because of preferences, data security, and have a relationshipservices with other companies). Installation services in the agreement are estimated to have the stand-alone price is $ 2,000,000.  The stand-alone sale price for maintenance is estimated at $ 1,000,000. Company others can also perform these maintenance services. Payment terms are $ 6,000,000 due immediately by way of transfer on time delivery and installation of equipment. The control transfer occurred on the same day.  PT TMJ delivered the equipment on 15 September 2019 and completed equipment installation on November 1, 2019 (control transfer completed). Billing and the payment occurred on the same date. Equipment maintenance starts 1 months after the installation is complete and will last for 1 year. The equipment has a useful life of 15 years. a. What are the performance obligations for the above transaction? b. If there is more than 1 performance obligation, how to allocate payment of $ 6,000,000 to each of these performance obligations? c. Prepare the journals needed to record the above transactions! [15 Sep 2019; Nov 1 2019; 31 Dec 2019; and 31 Dec 2020 assuming an adjusting entry only done at the end of the year. Please indicate "no entry" if you feel it is not necessary record on a certain date]