An inventory was purchased by Al Raha Furniture manufacturers on 1st January, 2016 for OMR 840,000. The net realizable value of that inventory as on 31st December, 2016 was OMR 770,000. During 2017, the inventory was sold for OMR 868,000.

Case (a) The inventory was reported at OMR 840,000 in the companys statement of position as on 31st December, 2016.

i. The inventory was reported at OMR 840,000 in the companys statement of position as on 31st December, 2016.

ii. As per the statement of financial position as on 31st December, 2017, the value of inventory was reported for OMR 868,000.

iii. There was a gain on sale inventory of OMR 28,000 and it was reported by companys financial statements when the inventory was sold in 2017.

iv. At the end of the year 2016, the company recognized a loss of OMR 70,000 and it was recorded in its statement of comprehensive income.

Case (b) On December 31, 2011, Brinton Corporations inventory had a net realizable value of OMR 550,000. The corporations cost of completion of work in progress was OMR 365,000. Trade discounts expected to be allowed on expected selling price of the inventory of OMR 590,000 @ 6%. Cash discounts expected to be allowed for prompt payment for the value of sale of inventory.

Required:

Case (a) Based on the above in information as a role of financial controller; justify your answer whether they are depicting a correct focus of accounting information according to the standards IAS 2 for each of the four options mentioned above?

Case (b) Provide your explanation to the management about the treatment of work in progress, trade discount and cash discount while estimating the net realizable value of the inventory.