Qno: 03The Islamic bank sells him a machinery at a mark-up of 10% per annum constant rate of return with afinancing period of 5 years. Instalments are paid yearlyItemAmountThe cost of machinery from china425,000Shipping charges57000Insurance cost27500transportation cost16500customs fees129000Total6,55,000A. Calculate the mark-up, murabaha selling price, the yearly instalment, and the profitrecognised per year.B. The journal entries in the bank records for initiation and recording of the receipt of theinstalments and recognition of profit if profit is recognised when the instalments arereceived and all instalments are received on schedule.

A. Markup = 10% for 5 years =0.10*5*6,55,000 =3,27,500 Murabaha selling price = 6,55,000+3,27,500…

A. Calculate the mark-up, murabaha selling price, the yearly instalment, and the profit recognised per year. B. The journal entries in the bank records for initiation and recording of the receipt of the instalments and recognition of profit if profit is recognised when the instalments are received and all instalments are received on schedule.

A. Calculate the mark-up, murabaha selling price, the yearly instalment, and the profit recognised per year. B. The journal entries in the bank records for initiation and recording of the receipt of the instalments and recognition of profit if profit is recognised when the instalments are received and all instalments are received on schedule.

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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