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QUESTION 2
Calculation:
2016
Total remaining capital at the end of 2015 $96,000 $224,000
25% shares of bank acquired by RSE at the beginning of 2016 $56,000 ($56,000)
Total remaining capital at the beginning of 2016 $152,000 $168,000
New PSR at beginning of 2016 47.5% 52.5%
Loss ($19,000) ($21,000)
$133,000 $147,000
25% shares of bank acquired by RSE at the end of 2016 $36,750 ($36,750)
Total remaining capital at the end of 2016 $169,750 $110,250
New PSR at end of 2016 60.63% 39.38%
2015 2016
Capital contribution 25% of bank share acquired by RSE at the beginning of
RSE: 2016
= 0.3 x $320,000 = $96,000 = 0.25 x $224,000 = $56,000
RSE:
= 0.4 x $66,880 = $26,752
HSBC AMANAH:
= 0.6 x $66,880 = $40,128
Loss on revaluation – property Loss: $40,000
$140,000 - $124,000 = $16,000 RSE:
= 0.525 x $40,000 = $21,000
HSBC AMANAH:
= 0.475 x $40,000 = $19,000
25% shares of bank acquired by RSE at the end of 2016
= 0.25 x $224,000 = $56,000
New PSR at end of 2016
RSE:
= $110,520 / ($110,520+ $169,750) = 60.6%
HSBC AMANAH:
= $110,520 / ($110,520+ $169,750) = 39.4%
Required
a. Journal entries for the bank for 2015 and 2016.
Year Item DR CR
2015
Jan-01 Musharakah Mutanaqisah $224,000
Loss on revaluation $16,000
Cash $80,000
Equipment $20,000
Property $140,000
Provision of musharakah financing
2016
Mar-25 Cash $72,000
Musharakah Mutanaqisah $56,000
Musharakah Profit $16,000
Sale of bank’s shares in Musharakah Financing
Cash $32,000
Musharakah Loss $4,750
Musharakah Mutanaqisah $36,750
Sale of bank’s shares in Musharakah Financing
b. An extract of Income Statement for the year ending 31 December 2015 and 2016
Income Statement (extract) for the year ended
2015 2016
Musharakah Profit/(Loss) $401,280 ($21,000)
Profit/(Loss) received from Musharakah $16,000 ($4,750)
Gain/(Loss) on asset revaluation ($16,000) -
Y2
Total remaining capital at the end of Y1 $300,000 $100,000
Loss ($37,500) ($12,500)
Total remaining capital at the beginning of Y2 $262,500 $87,500
Repayment ($100,000) $100,000
Total remaining capital at the end of Y2 $162,500 $187,500
New PSR at the end of Y3 46.4% 53.6%
Y3
Total remaining capital at the end of Y2 $162,500 $187,500
Repayment ($100,000) $100,000
Profit $55,714 $64,286
Total remaining capital at the end of Y3 $62,500 $287,500
New PSR at the end of Y3 18% 82%
Y4
Total remaining capital at the end of Y3 $62,500 $287,500
Loss ($5,400) ($24,600)
Total remaining capital at the beginning of Y4 $57,100 $262,900
Repayment ($57,100) $57,100
Total remaining capital at the end of Y4 $0 $320,000
New PSR at end of 2016 0% 100%
Y1 Y2 Y3 Y4
Capital contribution Repayment for each Profit: $120,000 Repayment for each
- $400,000 year BIMBT year
BIMBT = 0.46 x $120,000 BIMBT
= $400,000 / 4 yrs = $55,714 = $62,500 - $5,400
= $100,000 = $57,100
EXCEL
EXCEL = 0.53 x $120,000 EXCEL
= $400,000 / 4 yrs = $64,286 = $57,100
= $100,000
Profit: $80,000 Loss: $50,000 Repayment for each Loss: $30,000
year BIMBT
= 0.18 x $30,000
BIMBT BIMBT BIMBT $5,400
= 0.4 x $80,000 = 0.75 x $50,000 = $400,000 / 4 yrs
= $32,000 $37,500 = $100,000 EXCEL
= 0.82 x $30,000
EXCEL EXCEL EXCEL = $24,600
= 0.6 x $80,000 = 0.25 x $50,000 = $400,000 / 4 yrs
= $48,000 = $12,500 = $100,000
Repayment for each New PSR at the end of New PSR at the end New PSR at the end
year Y2 of Y3 of Y4
BIMBT BIMBT BIMBT BIMBT
= $400,000 / 4 yrs = $162,500 / ($162,500 + = $62,500/ ($62,500+ = $0/ ($0+ $320,000)
= $100,000 $187,500) $287,500) = 0%
= 46.4% = 18%
EXCEL EXCEL
= $400,000 / 4 yrs EXCEL EXCEL = $320,000 / ($0+
= $100,000 = $187,500/ ($162,500 + = $287,500/ $320,000)
$187,500) ($62,500+$287,500) = 100%
= 53.6% = 82%
New PSR at the end
of Y1
BIMBT
= $300,000 /
($300,000+$100,000)
= 75%
EXCEL
= $100,000 /
($300,000+$100,000)
= 25%
Required:
a. Prepare journal entries for Year 1 to Year 4
Year Item DR CR
Y1 Musharakah Mutanaqisah $400,000
Cash $400,000
Provision of musharakah financing
Cash $32,000
Musharakah Profit $32,000
Profit in Y1
Cash $100,000
Musharakah Mutanaqisah $100,000
Received repayment from Excel Berhad
Cash $50,000
Receivables $50,000
Musharakah Mutanaqisah $100,000
Received repayment from Excel Berhad
Y3 Cash $50,000
Receivables $50,000
Received outstanding repayment for Y2
Cash $55,714
Musharakah Profit $55,714
Profit in Y3
Cash $100,000
Musharakah Mutanaqisah $100,000
Received repayment from Excel Berhad
Cash $37,100
Receivables $20,000
Musharakah Mutanaqisah $57,100
Received repayment from Excel Berhad
b. What is the balance in the Musharakah Mutanaqisah Financing account as at the end of Year 2.
- $162,500
c. Prepare an extract of the Statement of Financial Position as at the end of Year 4.
Statement of Financial Position (extract) as at Y4
Y4
Musharakah Financing $0
Less: Provision for loss -
Net Musharakah Financing $0
QUESTION 4
Calculation:
DETAILS SPB BTI
2009
Capital contribution $96,000 $224,000
Profit $20,520 $47,880
Total remaining capital at the end of 2009 $96,000 $224,000
PSR 30% 70%
2010
Total remaining capital at the end of 2009 $96,000 $224,000
25% shares of bank acquired by SPB at the beginning of 2010 $56,000 ($56,000)
Total remaining capital at the end of 2010 $152,000 $168,000
New PSR at end of 2010 47.5% 52.5%
2011
Total remaining capital at the end of 2011 $152,000 $168,000
Loss ($12,000) ($28,000)
$140,000 $140,000
25% shares of bank acquired by SPB at the end of 2011 $35,000 ($35,000)
Total remaining capital at the end of 2011 $175,000 $105,000
New PSR at end of 2011 62.5% 37.5%
SPB
= 0.3 x $68,400 = $20,520
BTI
= 0.7 x $68,400 = $47,880
BTI
= $105,000 / ($105,000 +
$175,000)
= 37.5%
c. An extract of the Income Statement for the year ending 31 December 2010 and 2011
Income Statement (extract) for the year ended
2010 2011
Musharakah Profit/(Loss) $47,880 ($28,000)
Profit/(Loss) received from Musharakah $16,000 ($3,000)
Gain/(Loss) on asset revaluation ($16,000) -