Case: 5 PART-B (5 Marks) Mr. Ahmed local exporter in Oman and exports herbal products to various countries. Mr. Bader is an importer from UAE. Ahmed's transactions with its customers are on a cash and credit basis. On 2nd January 2019, Ahmed exported goods to Bader for OMR 25,000 and drew a four months bill on the later. Bader immediately accepted the bill and returned it to Ahmed. The next day, Ahmed received an order from Bahrain to export 5,000 units of herbal products on the condition that he should deliver the goods within one month. Ahmed was excited about the order as that will provide growth to his business, but at the same time he was concerned with arranging the cash to purchase the raw material, the estimated cost of producing 5,000 units will be OMR 25,000. Now Ahmed has two options one is to borrow a short term loan from a bank that will cost him 8% per annum and the other is discount the bill drawn on Bader. As he needed funds, being a customer of National Bank of Oman he got the bill discounted @ 6% pa The bill is duly met on the due date. Assume that the bank prepares its financial statements at the end of the year as on 31s March. You are required to: a) Comment on the benefits that Ahmed derives from the use of bills of exchange (100 words minimum/1.5 Marks) b) Calculate the amount received by Mr. Ahmed on discounting the bills and justify his choice to forego the option of borrowing a short term loan. (100 words minimum/1.5 Marks) c) Give journal entries in the books of the bank as the bill is met at the maturity (2 Marks) ** End of assignment** 11 Page