Question
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:
.
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:
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:
- Investment received from Al-Farouq Berhad
- Payment of profit / to record loss to Al-Farouq Berhad
- Repayment of the investment to Al-Farouq Berhad
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