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Red tag LLC has entered into a contract to supply 100,000 units of uniform garments to customer on sale or return basis at 20 OMR

Red tag LLC has entered into a contract to supply 100,000 units of uniform garments to customer on sale or return basis at 20 OMR each. The cost of making each uniform is 12 OMR. The term of sales provides two months to customer for the date of sale to return the items and get a full refund. The experience indicates that such customer tends to return back some items and it can be reliably estimated to be around 14% of such sold items are usually returned. Find the refund liability from the above case.

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