Question 1: Answer the following sections:

Section 1: Discuss five differences between Zakat and tax.?

Section 2:

Part I

Bank purchased a machine from the seller RM200,000 by cash and the bank leased to Mahmood the machine for 5 years using Ijarah Thumma Bai (AITAB) contract. Mahmood paid RM50,000 per year as Ijarah payment, At the end of year 5, the bank agreed to give the machine as a gift to Mahmood, thereby enabling the transfer of the ownership of the property to Mahmood.

Required:

Prepare journal entries to record the following transaction:

1. At the inception of a machine (at the time of contract).
2. When the installment is received in 1st year.
3. Transfer of ownership at the end of year 5.

Part II.

The bank and client executed a Murabahah contract at an agreed price of RM240,000 (RM200,000 cost and RM40,000 profit for a machine. The bank would receive payment by installment of RM48,000 per year for 5 years.

Required:

Prepare journal entries to record the following transaction:

1. At the inception of a machine (at the time of contract).
2. When the installment is received in 1st year.

Section 3:

Asma needs financing to buy a house for RM100,000. The Islamic bank sells her a house at a markup of 10% per annum constant rate of return with a financing period of 5 years. Instalments are paid yearly.

Required:

1. Calculate the markup, Murabahah selling price, the yearly instalment, and the profit recognized per year.
2. The journal entries in the bank records for initiation and recording of the receipt of the first instalment and recognition of profit if profit is recognized when the instalments are received and all instalments are received on schedule.
3. Show the extract of the balance sheet at the beginning and end of the first year and profit and loss account at the end of the same year.