Case 5: As a part of the account's finalization team for XYZ SAOG you been allocated certain transactions which you have to deal with. Such items relate to inventory valuation and preparation of cash flow statement. You are required to provide with appropriate treatment with regards to the underlying standards: Inventory items: For each of the items mentioned below provide the correct treatment, comments and calculate the amount of each item of inventory (6 marks) Item 1: The company produces a unique product that cost RO 50 per unit. The company has 8,000 units of such finished product in its warehouse. Its estimated selling price per kg is RO 60 per unit. Due to pest problem 300 units of such stock were found damaged on the valuation date. The product can still be sold but would need repair of RO 7 per unit and other selling cost of RO 4 per unit. Item 2: The Company purchased 636,000 litres of oil in the beginning of the year for a price of RO 0.150 per litre. The company sold oil in a barrel consisting of 159 litres of oil for RO 30 each barrel. Throughout the year the company was able to sell 2,536 barrels. At the end of the year the selling price of the barrel fell to RO 20 per barrel. Item 3: The Company also sells different types of cans which is used for packing tuna by fishing company. At the end of the year it has around 1.5 million cans in stock costing 200 baisa per 100 cans. Such cans are sold to the fishing company @ of 20% profit on cost. The fishing company changed its packaging and wants to make such changes to the cans from here onwards. The company will incur an additional cost of 50 baisa per 100 cans on its redesigning. The fishing company denied bearing such additional cost. The company is also in the process of preparing its cash flow statement: For each of the items mentioned below provide with your necessary comments and treatment. (4 marks) During the year the company bought a competitors business and acquired all its shares at a purchase consideration of RO 600,000. The purchase consideration was paid in cash RO 200,000 and the remaining amount was in the form of company's shares. This transaction was shown in cash inflow from financing activity for RO 600,000 The company also collected RO 10,000 on behalf of a client, and immediately paid it to the client, less a commission of RO 500. This transaction was shown as a receipt of RO 10,000 and payment of RO 9,500 in cash flow in investing activities.