RG Construction has entered a contract to supply 500 identical items on sale or return basis to a customer for OMR 400 each. Each item costs company OMR 200 to make. The term of sales provides three months to customer from the date of sale to return the items and get a full refund. The reliable estimation shows that around 5% of such sold items are usually returned. What is the amount of refund liability to be recognised in the statement of financial position? O a. OMR 10,000. O b. OMR 100,000. O C. OMR 200,000. O d. OMR 6,000.

RG Construction has entered a contract to supply 500 identical items on sale or return basis to a customer for OMR 400 each. Each item costs company OMR 200 to make. The term of sales provides three months to customer from the date of sale to return the items and get a full refund. The reliable estimation shows that around 5% of such sold items are usually returned. What is the amount of refund liability to be recognised in the statement of financial position? O a. OMR 10,000. O b. OMR 100,000. O C. OMR 200,000. O d. OMR 6,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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