ht to page IL Page view Ad Read aloud Case: 5 PART - A (5 Marks) Ahlibank's Financial Institutions Group (FIG) is responsible for the bank's correspondent banking relationships. FIG has a dedicated team of professionals to develop and maintain long-lasting relationships with their clients and concerning its financial services, FIG purchased bills from its various Corporate Customers on different dates throughout the year. While calculating the rebate on bills discounted, the bank generally considers 365 per annum except for a leap year. You have newly joined as an assistant in the accounts department and the following particulars are extracted from the books of Ahlibank for the year ending 31 March 2018. You are given with opening balances at the beginning of the year, the total Bills purchased during the year amounting to OMR 6,000,000. The balance of discount received during the year was OMR 350,000. Last year closing balance of rebate on bills discounted was OMR 90,800. Additional infanti ar bills discounted during the year is as follows: ouncements/final-assessment-timetable-041620 U Page VIEW AV Read aloud the year amounting to OMR6,000,000. The balance of discount received during the year was OMR 350,000. Last year closing balance of rebate on bills discounted was OMR 90,800. Additional information on bills discounted during the year is as follows: Amount OMR Term months Date of the bills purchased 16th February 25th December 29th January 15th November 21th February 28th March Discounted at % per annum 8 12 11 1300,000 800,000 1500,000 200,000 1800,000 400,000 3 3 3 4 2 4 10 9 10 Keeping in view all the information provided you are required to prepare: a) Calculate the rebate on bills discounted for the year ending 31st March 2018 (4 Marks) b) Show the discount account in the books of Ahlibank (1 Mark) Ellege/announcements/final-assessment-timetable-041620 li - + Fit to page ID Page view A Read aloud 2 ade 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% p.a. 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 31st March. e-college/announcements/final-assessment-timetable-041620 arch 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% p.a. 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 31st 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) lege/announcements/final-assessment-timetable-041620