NAME : SHALENI A/P PRABALAN

MATRIX NUM : EX03746

Murabahah Question 7.4

Bank Muamalat Berhad provides a Bai Bithaman Ajil financing facility to Dodik for the
purpose of buying a shop lot. The financing is amounting to RM400,000 at a constant
rate of return 10% for a period of 4 years. At the end of the contract, Dodik owes the
bank amounting to RM40,000. It is the policy of the bank to charge customers a
penalty fee of 4% per month for any outstanding amount due at the end of the
contract and the amount collected is disbursed as charity. Dodik pay the penalty fee
after 12 month later.

You are required to:

i. Show journal entries for the transactions for the 5 years in the book of Bank
Muamalat.

ii. Show the extract of the balance sheet and income statements of Bank Muamalat in
respect of the above transactions.

Financing : 400,000
Profit : 10% x 400,000/4
= 10,000

i.

Year Particulars Debit Credit

Year - 0 BBA Financing (4 years x RM110,000) 440,000

Cash 400,000

Unearned Income (10% of RM400,000) 40,000

Year - 1 Cash 110,000

BBA Financing 110,000

Unearned Income 10,000

Profit of BBA Financing 10,000

Year - 2 Cash 110,000

BBA Financing 110,000

Unearned Income 10,000

Profit of BBA Financing 10,000
Year - 3 Cash 110,000
BBA Financing 110,000

Unearned Income 10,000

Profit of BBA Financing 10,000

Year - 4 Cash (110,000 - 40,000) 70,000

Trade Receivables 40,000
BBA Financing 110,000

Unearned Income 10,000

Profit of BBA Financing 10,000

Year - 5 Trade Receivables 19,200

Other Payable - Charity 19,200
Late Payment Charge of 4% x 40000 x 12
months)

ii.
Extract of Balance Sheet for Bank Muamalat
Year 0 Year 1 Year 2 Year 3 Year 4
ASSETS
BBA Financing 440,000 440,000 330,000 220,000 110,000
- (110,000) (110,000) (110,000) (110,000)
440,000 330,000 220,000 110,000 -

Cash (440,000) (440,000) (290,000) (180,000) (70,000)

- 110,000 110,000 110,000 70,000
(400,000) (290,000) (180,000) (70,000) -

Trade Receivable 40,000

19,200
59,200
LIABILITIES
Unearned Income 40,000 40,000 30,000 20,000 10,000
- (10,000) (10,000) (10,000) (10,000)
40,000 30,000 20,000 10,000 -

Trade Payable - Charity 19,200

19,200
Profit of BBA Financing - 10,000 10,000 10,000 10,000