LiveSmart Furniture Co. was established in the Kingdom of Bahrain and has been operating for several years. The showroom located in Hamala displays a variety of home furniture and accessories specifically designed for the comfort of homeowners. Bespoke furniture is designed and executed by the hands of Italian craftspeople. LiveSmart Fumiture adopts the calendar year as Its fiscal year. LIVESMART FURNITURE LiveSmart Furniture is in the process of preparing their financial statements for the year ended December 31, 2021. A trial balance along with several business-related appendices are presented below: LiveSynart Furniture Co. Unadjusted Trial Balance December 31, 2021 Debit BD Credit BD 26,193 123,200 6,400 78,000 6,620 2,000 2,400 Cash Accounts receivable. Allowance for Doubtful Accounts. Inventory, January 1, 2021. Supplies. Prepaid insurance.. Prepaid rent Purchases. 100,000 Notes receivable (short-term). 15,000 Land.. 478,738 Equipment. 220,000 Accumulated depreciation-Equipment. 127,188 Buildings. 94,000 Accumulated depreciation-Buildings. 14,100 Accounts payable. 20,000 Salaries payable 12,000 Unearned revenue 30,000 Loan. 300,000 LiveSmart, Capital.. 598,003 LiveSmart, Withdrawals 2,100 Sales Revenue 110.000 Repairs and maintenance expense 1,230 Salaries expense 66,200 Advertising expense.. 1,000 Utilities expense. 1,010 Totals 1.217.691 1.217.691 Appendix 1 RIVERMARY TO: FINANCIAL CONTROLLER FROM: CHIEF AUDIT EXECUTIVE SUBJECT: INVENTORY ISSUES MEMO During the internal audit at year-end, we noted that the following with regards to inventory: The company purchased additional merchandise that total to BD100,000 during the year. The aggregate purchases amount was verified and included in the unadjusted trial balance. The ending inventory value of BD90,200 was initially calculated based on the inventory count conducted at year-end however the company did not include in the count purchased goods of BD12,000, which were in transit (terms: FOB shipping point). Also, the company did not include in the count inventory that had been sold with a cost of BD13,200, which was in transit (terms: FOB destination). The sales amount of BD14,000 was appropriately recorded in the books. The company included in the inventory goods held on consignment for Road Co., costing BD16,000. The ending inventory value of Product Y (a new product traded during the year) was missed by error however the related purchases and sales have been appropriately accounted for and displayed in the unadjusted trial balance. Product Y information is shown below: Activities Date Jan 1 Jan 6 Beginning inventory Purchase Units Acquired at Cost Nil Units Sold at Retail 100 units @BD10 Jan 10 Mar 20 Apr 8 Sales 90 units @BD40 Purchase 250 units @BD15 Sales 140 units @BD50 Aug 30 Purchase 400 units @BD20 Nov 3 Nov 28 Sales Purchase 300 units @BD40 600 units @BD25 An assessment of NRV showed no material variation from inventory cost. Yet, we emphasize on the importance of using the FIFO cost flow assumption consistently unless a change of accounting method is appropriately justified. The company is using periodic inventory system