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On 1 st January 2020, Bank Taqwa Berhad received an investment from Al-Farouq Berhad for of a sum RM2,000,000. The investment was split as follows:

On 1st January 2020, Bank Taqwa Berhad received an investment from Al-Farouq Berhad for of a sum RM2,000,000. The investment was split as follows:

image text in transcribed.

The agreed profit sharing ratio for Unrestricted Mudarabah Investment Account was 80:20 to company and the bank respectively. Meanwhile, profit sharing ratio for Restricted Mudarabah Investment Account was 60:40, company and the bank.

On 1st July 2020, Al-Farouq Berhad invest additional RM500,000 into the Restricted Mudarabah Investment Account. Early December 2020, Bank Taqwa announce the following profit / (loss) before distribution to the depositors as follows:

image text in transcribed

The profit is payable on 31 December 2020. On 1st January 2021, Al-Farouq Berhad withdraw RM200,000 from the Unrestricted Mudarabah Investment Account.

Prepare the journal entries in the book of Bank Taqwa Berhad to record:

  1. Investment received from Al-Farouq Berhad
  2. Payment of profit / to record loss to Al-Farouq Berhad
  3. Repayment of the investment to Al-Farouq Berhad
Account Unrestricted Mudarabah Investment Account Restricted Mudarabah Investment Account Allocation 60 % 40 % URIA account 6 months & less 12 months & less More than 12 months Profit /(Loss) 3.80% 4.50% 5.20% RIA account 6 months & less 12 months & less More than 12 months Profit/(Loss) (0.50%) 3.40% 4.20%

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