Ahmed Company has entered into a contract to supply 1750 similar items on sale or return basis to a customer for OMR 350 each. Each item costs company OMR 140 to make. The term of sales provides two months to customer from the date of sale to return the items and get a full refund. The past experience indicates that such customer tends to return back some items and it can be reliably estimated to be around 10% of such sold items are usually returned.

Based on the above scenario prepare necessary treatment for such transaction and answer the following 5 questions as per IFRS 15 (Do not upload any information).

According to IFRS 15, the refund liability will be treated as:

a.

Provision

b.

Contingent Liability

c.

Long term Liability

d.

Current Liability

Q2

According to this scenario the calculated value of inventory stock to be capitalized:

a.

OMR 255000

b.

OMR 245000

c.

OMR 254000

d.

OMR 225000

Q3

According to this scenario the calculated value of total revenue will be:

a.

OMR 515250

b.

OMR 615200

c.

OMR 612500

d.

OMR 515500

Q4

According to this scenario the calculated value of Receivables will be:

a.

OMR 651250

b.

OMR 515250

c.

OMR 551250

d.

OMR 615250

Q5

According to this scenario the calculated value of cost of sales will be:

a.

OMR 222500

b.

OMR 202500

c.

OMR 210500

d.

OMR 220500