Company A has entered into a mudharabah contract with Bank Shari’ah in which the company provides monetary capital of RM1,000,000. Company B who had agreed to invest RM1,000,000. The profit sharing between three
Q: The terms of the arrangement require the operator to: a. Construct a road-completing construction…
A: Opportunity cost: It is the cost of gain sacrificed when one alternative is selected over the cost…
Q: Medtronic Inc. has an opportunity to supply medical devices to Memorial Hermann, a private hospital…
A: 1) Figures in millions Year 0 1 2 3 4 5 Skanska payments 4 3.2 7 5.5 Loan…
Q: Zephyr Company is provided a grant by a foreign government for the purpose of acquiring land for a…
A: Working note: Computation of carrying amount of loan on January 1, 2021: Carrying amount of…
Q: On January 1, 20x1, Entity A obtained a 12%, ₱6,000,000 loan, specifically to finance the…
A: Historical cost is the worth of an asset when it is acquired. This value is termed historical when…
Q: Medtronic Inc. has an opportunity to supply medical devices to Memorial Hermann, a private hospital…
A: Cash flow is the flow of actual cash to the corporation or business. There are two kinds of cash…
Q: Both customer and bank enter into a musharakah contract which requires RM7 million of capital…
A: The net income is the net profit of the company earned during the period. The net income includes…
Q: Example 2 Kaokodi Ltd received a grant of GHC60 million to compensate it for costs it incurred in…
A: NOTE : As per BARTLEBY guidelines, when multiple questions are given then first question is to be…
Q: Entity A is a construction company listed in Hong Kong. It commenced a contract to build a bridge…
A: Recognition on work certified basis means that a company used to recognize the revenue and expenses…
Q: Your supervisor has tasked you with evaluating several loans related to a new expansion project.…
A: The present value of annuity refers to the current value of a series of future payments. The present…
Q: On January 1, 20x1, Entity A obtained a 10%, ₱5,000,000 loan, specifically to finance the…
A: Interest on loan = Amount borrowed x rate of interest x no. of years = ₱5,000,000 x % x 1 = ₱500,000
Q: Bank Al-Izz provided working capital to Tijarah Construction. based on the principle of musharakah…
A: Profit and loss is the difference between revenue and expense generated and incurred during the…
Q: government company decided to open an account for strategic purposes (to help in facing the…
A: Annual withdrawal for indefinite period will be the interest amount earned on the amount deposit.…
Q: The terms of the arrangement require the operator to: Construct a road-completing construction…
A: According the International Accounting Standard 11 (IAS 11), the revenues and expenses associated…
Q: Magna Corporation is provided a grant by a foreigner government for the purpose of acquiring land…
A: 1) Computation:
Q: In order to finance working capital of ABC( PVT) Ltd., Islamic bank signed Istisna’a order with…
A: Financial institutions are the entities that accept deposits from the public to grant funds. The…
Q: An Islamic bank provided $400,000 for a three-year mudaraba financing contract at the profit sharing…
A: NOTE : As per BARTLEBY guidelines, when multiple questions are given then first question is to be…
Q: Three joint operators are involved in a joint operation that manufactures ships chandlery. At the…
A: Joint operations means where two or more person comes together to do the business jointly and share…
Q: Magna Corporation is provided a grant by a foreigner government for the purpose of acquiring land…
A: As per IAS 20: "Accounting for Government Grants and Disclosure of Government Assistance" The…
Q: ADIB has Restricted Investment Account (RIA) based on Mudaraba with profit sharing percentages of…
A: A registered investment advisor (RIA) is a company that provides financial advice to customers and…
Q: Medtronic Inc. has an opportunity to supply medical devices to Memorial Hermann, a prívate hospital…
A: Note: As per our guidelines, only the first three subparts will be answered. 1. Figures in…
Q: Hermes Co., a private company, enters into a service concession arrangement whereby Hermes…
A: In this problem we have given the contract cost of building…
Q: There are two competing proposals for the redevelopment of a piece of vacant land in Accra. One is…
A: Since you have asked multiple parts in a question. We will solve the first 3 parts as per policy.…
Q: Surgimed Ghana Ltd. received a government grant of GH¢300,000 for acquiring plant and machinery…
A: Every company will prepare the accounting statements based on the transactions, and nature of the…
Q: A company is bidding for three contracts which are awarded independently of each other. The board…
A: Given: Probability of winning contract X = 55% Probability of winning contract Y = 25% Probability…
Q: Zephyr Company is provided a grant by a foreign government for the purpose of acquiring land for a…
A: Working notes:
Q: At the beginning of current year, Exuberant Company received a consolidated grant of P12,000,000.…
A: Grants means the amount received without any sale of product or providing any services. When grants…
Q: The "alpha", a small construction company, owed the company BETA 4000 euros, an amount that it had…
A: As per accrual concept of accounting, all revenues for the particular accounting period should be…
Q: On January 1, 2011, Sagada Company received a grant of P25,000,000 from the American government in…
A: Correct option is A. Explanation: Section 24 of IFRS for SME, states that government grants…
Q: Cranston LTD. prepares its financial statements according to International Financial Reporting…
A: Requirement 1: Accounting for government grant As per International Financial Reporting Standards,…
Q: An entity already has a number of general loan arrangements: Loan 1 of RM800,000, interest paid at…
A: Total loan = 800000 +2000000+ 400000 = 3200000 Cost of the printing press…
Q: To encourage entities to expand their operations in a specified development zone, where it is…
A: The accrual concept is one of the key concepts in accounting and it is based on the belief that the…
Q: A commercial real state developer plans to borrow money to finance an upscale mall in an exclusive…
A: Firstly, calculate the present value of annuity for 14 years at rate of 10% Present value of annuity…
Q: Agency XYZ received from DBM allotment for capital outlay and NCA amounting to P15 million and P10…
A: The funds are allocated to Agency XYZ by DBM allotment for the expenditures incurred during the…
Q: The terms of the arrangement require the operator to: Construct a road-completing construction…
A: Opportunity cost refers to the situation of loss extent of profit happened when a business chooses…
Q: On January 1, 20X2, ABC Company received a consolidated grant of P40,000,000. Three-fourths of the…
A: SOLUTION- GOVERNMENT GRANT - IT IS A FINANCIAL AID BY THE FEDERAL GOVERNMENT TO THE GRANTEE IN…
Q: Muda Berhad is the leading infrastructure developers in the country. Being a nation building…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Colorado Construction Co., a private company that reports under ASPE, was contracted by a provincial…
A:
Q: Dexter Construction Corporation is building a student condominium complex; it started construction…
A: Capitalized interest:- It is the unpaid interest that is added to the current principal balances of…
Q: On January 1, 20x1, Entity A obtained a 12%, ₱6,000,000 loan, specifically to finance the…
A: A capitalisation of a cost is the process of recording it as an asset when the future benefits are…
Q: Dakota Hi-C Steel signed a contract that will generate revenue of $210,000 now, $226,800 in year 1,…
A: The future value is defined as the value of the current asset that is based on the future date on…
Q: Idris has been awarded a contract to supply a crude palm oil at a price RM1000 per metric ton. Deeva…
A: Facts of question : Idris has been awarded a contract to supply crude palm oil at a price of RM1000…
Q: Bank Al-Izz provided working capital to Tijarah Construction. based on the principle of musharakah…
A: The ratio of profit/loss is 60:40 between the customer and bank, hence it is divided in this ratio…
Q: Zephyr Company is provided a grant by a foreign government for. the purpose of acquiring land for a…
A: As per the IFRS 9, financial instruments, the interest-free loan is initially recognized at the…
Q: Entity A has the following loan finance in place during the year: $2,560,000 of 7.50% loan finance…
A: Borrowing cost :- Borrowing costs are capitalised as part of the cost of a qualifying asset when it…
Q: The terms of the arrangement require the operator to: Construct a road-completing construction…
A: Statement showing Profit/Loss for the Year 1 and 2 Particulars Year 1 Year 2 Sales…
Q: Peyton Company started construction of a new office building on January 1, 20x1, and moved into the…
A: The question is multiple choice question. Required Choose the Correct Option.
Q: income of P20,000 was earned on these funds while they were June 2007 amounted to P700,000. Interest…
A: Notes Payable is an overall record risk account in which an organization records the face measures…
Q: Surgimed Ghana Ltd. received a government grant of GH¢300,000 for acquiring plant and machinery…
A: Surgimed Ghana Ltd. received a government grant of GH¢300,000 for acquiring plant and machinery…
Company A has entered into a mudharabah contract with Bank Shari’ah in which the company provides monetary capital of RM1,000,000. Company B who had agreed to invest RM1,000,000. The profit sharing between three of them is 1:1:1 for Company A, Company B and the Bank respectively.
Bank Shari’ah entered into another mudharabah contract with Company C to undertake a housing development project. Bank’s contribution in this project was RM2,000,000 and they had agreed on the profit-sharing ratio of 80 : 20 (Bank : Company C).
Assume the following results of the venture:
Year Profit / (Loss)
1 (750,000)
2 700,000
3 1,500,000
You are required to:
i- Determine the
Step by step
Solved in 2 steps
- 1. Abdullah bin Ahmad has entered into a Mudarabah contract with Bank Amanah Berhad in which he provides monetary capital of $500,000 to be managed and invested by the Bank. The Bank provides Al-Mudharabah Moqayadah investment account facility to Abdullah whereby the Bank will invest in a specific project as agreed by the client. For this project there are two other investors, Hashim and Ibrahim who have invested $500,000 and $200,000 respectively. The profit sharing between four of them is 5:5:2:2 for Abdullah, Hashim, Ibrahim, and the Bank respectively. The Bank has entered into another Mudarabah contract (ReMudaraba) with Al Majd Development Berhad to undertake manufacturing project and they agreed on the profit sharing ratio of 70:30 (Bank: Al Majd). You are required to determine the profit or loss to be shared at the end of the contract by the five parties involved above if: i. Profit $550,000 ; or ii. Loss $350,000. 2. Bank Ahsan Berhad contributed $2,000,000 for a five-year…Both customer and bank enter into a musharakah contract which requires RM7 million of capital investment. The Islamic bank makes a contribution of RM4 million, while the remaining of the capital contributed by the customer. The agreed profit sharing ratio is 60:40 (60 percent to bank and 40 percent to customer). Loss of RM 1.5 million is incurred at the end of the investment period. Compute the amount of loss bare by the customer.An entity already has a number of general loan arrangements:Loan 1 of RM800,000, interest paid at 9%;Loan 2 of RM2 million, interest paid at 8%; andLoan 3 of RM400,000, interest paid at 7.5%. The entity has commissioned a new printing press to be constructed on its behalf. The total cost will be RM800,000 and the entity will be able to fund the purchase from its existing borrowings since it has arranged for stage payments to be made. The construction takes six months. i) Calculate the capitalization rate (ii) Calculate the total cost of the printing press (iii) Define a ‘qualifying asset’ and discuss the criteria to be fulfilled for eligibility to capitalize borrowing cost incurred for qualifying asset.
- Shamil Islamic Bank agreed to manufacture an apartment for its client Jalal (from joint investment funds) under the following conditions:- Implementing the work according to the engineering plans submitted to the bank.The price of the apartment is 70,000 dinars, paid as follows:- 25,000 dinars upon completion of the building foundations.- 25,000 dinars upon completion of the majority of the building.- 20,000 dinars upon delivery of the apartment.The following operations occurred:- On April 4, 2008, the bank paid in cash the amount of 10,000 dinars for cement, iron, sand, etc.On April 20, 2008, the bank deposited an amount of 8,000 dinars, the price of cement and iron, in an account under notice for Al-Ikhwa Building Materials Stores. On April 25, 2008, the bank paid workers’ wages in the amount of 3,000 dinars in cash.- On May 1, 2008, he sent the first claim to client Jalal as agreed.- On 5/4/2008, Jalal paid the first agreed-upon payment.- On 5/5/2008, the bank paid 20,000 dinars for…ON 20th February 2020, Whiz Telecoms obtained a license from ZICTA to operate a mobile cellular business. The project will be carried out by a special purpose vehicle in which Whiz owns 75% of the equity and the 25% is held by Unilus. The project requires an outlay of K50 billion of which K10 billion will come from equity contribution by the sponsors. The balance of K40 billion will be raised through syndicated loan. The SPV therefore intends to carry out a cash flow analysis to determine the financial viability of this project. Required:Describe the important factors that the SPV should consider in carrying out a cash flow analysis.On January 1, 2021, Super Balut Co. establishes a branch for an initial cash investment of P10,000,000. The subsequent transactions are as follows: a. On January 3, 2021, the home office acquires land and building to be used by the branch for a total cost of P30,000,000. The branch records the assets in its books. The fair value of the land is P11,000,000, while the fair value of the building is P22,000,000. The building has an estimated useful life of 20 years and no residual value. The company uses the straight-line method of depreciation. b. On February 14, 2021, the home office transfers inventory worth P20,000,000 to the branch. The home office pays freight of P500,000. c. On March 1, 2021, the home office transfers additional inventory worth P5,000,000 to the branch. This time the branch pays the freight of P100,000. d. On March 31, 2021, the branch acquires equipment for P900,000 cash. The equipment will be carried in the home office’s books. The equipment has a useful life of…
- Idris has been awarded a contract to supply a crude palm oil at a price RM1000 per metric ton. Deeva Mills Berhad, an established company will purchase this commodity as per agreed price. An agreement has been signed between Idris and Deeva Mills Berhad. Based on the situation above, please answer the following questions: a. Analyse the financing facilities that suits to the above situation. b. Discuss the responsibilities of the parties involved in this contract. c. Explain the benefit received by Idris if he enters into this contract. d. Discuss the consequences faced by Idris if he unable to deliver the commodity within the stipulated time.Property C has a single tenant and NOI of $15 million in year one. The building is purchased for cash at a cap rate of 6%. The operator invests 15% of the purchase price and finance partner invests the remainder. From any operating cash flow, the partners agree that the finance partner will have a preferred payout of 6%, simple interest. The operator will then receive 6% from operating cash flow. If there is any excess cash flow it will be held as a reserve to fund any operating deficits or capital needs. If a reserve still exists at the end of the transaction it will be added to the sales proceeds and distributed. Upon sale, the finance partner receives a preferred return of all invested capital and 6% annual, simple interest, to the extent it has not yet been paid. Next, the operating partner receives a return of all invested capital and 6% annual, simple interest, to the extent it has not yet been paid. The operating partner then receives 2x its pro rata share of any available…Bank Al Ain Islami provides a financing facility based on the Murabaha principle to Seif Construction to purchase specialized Equipment to be used for their construction project. The amount of financing is $15,000,000 at a constant rate of return of 10% for a period of 5 years. Due to some cash flow problems, Seif Construction paid the final installment in Year 6. Required: i. ii. Present a statement showing the amount of Net Receivable, Unearned Murabaha Income, and Murabaha Income for the whole duration of the contract.Prepare journal entries for Bank Al Ain Islami for the above transactions (YO-Y6).
- On 1 April 2020, Apollo Berhad made a RM1,000,000 loan from the bank at an interest rate of10 percent, equal to its effective interest rate for the development of the company's power generation facilities. On 1 April, the loan was obtained and RM300,000 was used on qualifying properties. On 1 April, the company deposited the remaining balance at a rate of 6% per annum in a bank yielding interest.On 31 December 2020, when the construction was finished and ready for use, the full amount was withdrawn and paid to the contractor. On 31 March 2021, the company returned the loan to the bank. As of 1 April 2021, power generation facilities were eligible for use in the undertaking. Requirement : (a) Calculate the net borrowing cost that should be capitalised as part of the cost of the new store and the finance cost that should be reported in the income statement for the year ended 31 March 2021. (b) Show the extracts from the income statement for the year ended 31 March 2021 and the statement…ABC Fund has decided to enter into a joint venture with Newtown Development Inc. to develop and operate an office building that will require an initial investment of $100 million to cover all the development costs (hard and soft costs). There will be no debt financing for the joint venture. Each party invests its capital at the beginning of the first year and cash flow from operations is projected as follows: Year 1 $ 2,000,000Year 2 4,000,000Year 3 9,000,000Year 4 12,000,000Year 5 14,000,000It is expected that the property will be sold at the end of year 5 for $150 million. ABC Fund will invest $45 million and Newtown Development Inc. will invest the remaining $55 million needed for the development costs. The $50 million development costs already include a developer fee to Newtown Development Inc. and the cash flow projections for each year above are net of a property management fee being paid to Newtown Development Inc. ABC Fund will receive a 5 percent operating return that is…I Company received a government grant of P15,000,000 to install and run a windmill in an economically backward area. The entity has estimated that such a windmill would cost P25,000,000 to construct. The secondary condition attached to the grant is that the entity shall hire labor in the local market from the economically backward area where the windmill is located, instead of employing workers from other parts of the country. The entity shall maintain a ratio of 1:1 local worker to workers from outside in its labor force for the next 5 years. The construction was completed at the beginning of current year. The windmill is to be depreciated using the straight line method over a period of 10 years. What amount of income from the government grant is recognized for the current year?