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The Shell Oil Company purchases 200 barrels of oil @ OMR 60 per barrel on September 2020, as a speculative purchase (However it has no
The Shell Oil Company purchases 200 barrels of oil @ OMR 60 per barrel on September 2020, as a speculative purchase (However it has no contract to sell the oil) out of which 50 barrels were sold for OMR 60 in the month of November 2020. In the month of December 2020, the price falls to OMR 50 per barrel at period end, and futher no oil has been sold in December 2020, Considering IAS 2 identify the appropriate accounting treatment in the books of shell oil company The company shall recognize write down to inventory of OMR 2000 as an expense and inventory value to OMR 9000 The closing stock of inventory shall be OMR 9000 and there is no need to write down to inventory as expense The closing stock of inventory shall be OMR 7500 and there is no need to write down to inventory as expense The company shall recognize write down to inventory of OMR 1500 as an expense and inventory value to OMR7500
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