Case study 3: RAC S.A.O.G is a well-established public company which was involved in production and sale of medical equipment. The company was registered with an authorized capital of OMR 120 million ordinary shares of 200 baiza each. The company had in issued and paid up capital of OMR 60 million. In the year 2016 company had heavy cash resources and was contemplating on the use of such cash resources. The board of directors outlined share repurchase program which would enable the company to repurchase at least 7 per cent of its outstanding shares. The company had an opening balance of OMR 25 million in its retained earnings account at the beginning of the year 2016. After completing the required formalities for such repurchase in the year 2016, the company was able to buy-back 12 million shares at OMR 15.6 million. Later in the year 2018 the company was able to repurchase another 9 million shares for OMR 13.5 million. The company earned profits after tax of OMR 80 million in 2016, OMR 85 million in 2017 and OMR 90 million in 2018. The company decided to distribute dividends as mentioned below: 2016: The company prior to repurchase paid interim dividend of 4% and thereafter the directors proposed a final dividend of 12% which was approved at the end of the year but was paid in the next year. 2017: The Company proposed a final dividend of 15% which was approved and paid in the beginning of the next year 2018: The Company declared and paid interim dividend of 5% after the repurchase and thereafter proposed a final dividend at the end of the year which was approved and paid in year 2019. You are required to evaluate the overall scenario and answer the following questions: a. Based on the scenario presented above outline the impact of decision to buyback ordinary shares on the company? Was the company able to achieve its target with its shares repurchase program. Support your answer with necessary calculations (3 marks - Min 150 words) b. Provide all necessary calculations and accounting treatment for transactions related to repurchased stock? (3 marks) c. Provide with all necessary calculations and accounting treatment with regards to dividends and statement of retained earnings for the period 2016 - 2018? (4 marks) Case study 3: RAC S.A.O.G is a well-established public company which was involved in production and sale of medical equipment. The company was registered with an authorized capital of OMR 120 million ordinary shares of 200 baiza each. The company had in issued and paid up capital of OMR 60 million. In the year 2016 company had heavy cash resources and was contemplating on the use of such cash resources. The board of directors outlined share repurchase program which would enable the company to repurchase at least 7 per cent of its outstanding shares. The company had an opening balance of OMR 25 million in its retained earnings account at the beginning of the year 2016. After completing the required formalities for such repurchase in the year 2016, the company was able to buy-back 12 million shares at OMR 15.6 million. Later in the year 2018 the company was able to repurchase another 9 million shares for OMR 13.5 million. The company earned profits after tax of OMR 80 million in 2016, OMR 85 million in 2017 and OMR 90 million in 2018. The company decided to distribute dividends as mentioned below: 2016: The company prior to repurchase paid interim dividend of 4% and thereafter the directors proposed a final dividend of 12% which was approved at the end of the year but was paid in the next year. 2017: The Company proposed a final dividend of 15% which was approved and paid in the beginning of the next year 2018: The Company declared and paid interim dividend of 5% after the repurchase and thereafter proposed a final dividend at the end of the year which was approved and paid in year 2019. You are required to evaluate the overall scenario and answer the following questions: a. Based on the scenario presented above outline the impact of decision to buyback ordinary shares on the company? Was the company able to achieve its target with its shares repurchase program. Support your answer with necessary calculations (3 marks - Min 150 words) b. Provide all necessary calculations and accounting treatment for transactions related to repurchased stock? (3 marks) c. Provide with all necessary calculations and accounting treatment with regards to dividends and statement of retained earnings for the period 2016 - 2018? (4 marks)