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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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

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Qno: 03
The Islamic bank sells him a machinery at a mark-up of 10% per annum constant rate of return with a
financing period of 5 years. Instalments are paid yearly
Item
Amount
The cost of machinery from china
425,000
Shipping charges
57000
Insurance cost
27500
transportation cost
16500
customs fees
129000
Total
6,55,000
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.

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