Question Completion Status: 1 QUESTION 1 Bank Muslim has entered into an Ijara contract with Barakah Construction to lease equipment for a period of 5 years. The bank purchased specialized equipment from a local manufacturer on 01 10 points Save Answer January 2017 for $1,100,000 and incurred a transportation cost of $100,000. The Bank also incurred a legal fee of $50,000 relating to the ljara contract, which the bank considered to be material. Both parties have agreed that the installments are paid every quarter. The rental payment was agreed at $40,000 per month. The residual value of the equipment after 5 years is expected to be $200,000 based on the estimate of a certified valuer. In 2018 and 2020, Barakah Construction incurred repair costs due to mechanical default not due to the normal usage of the asset amounting to $50,000 and $40,000 respectively. Every year, Barakah Construction incurred routine maintenance costs due to wear and tear amounting to $20,000 per year on average. Required: (a) Prepare a profit statement to recognize the above ljara contract in the books of Bank Muslim for the five-year period based on Ijara Muntahia Bitamleek (IMB) through the Equivalent Value method as prescribed by AAOIFI FAS 8. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BI S Paragraph Arial 10pt ev TX % Q E X2 X2 & T Te + T 99 2 + EX F E H (1) V HI A P O WORDS POWERED BY TINY Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and Submit Question Completion Status: 1 QUESTION 1 Bank Muslim has entered into an Ijara contract with Barakah Construction to lease equipment for a period of 5 years. The bank purchased specialized equipment from a local manufacturer on 01 10 points Save Answer January 2017 for $1,100,000 and incurred a transportation cost of $100,000. The Bank also incurred a legal fee of $50,000 relating to the ljara contract, which the bank considered to be material. Both parties have agreed that the installments are paid every quarter. The rental payment was agreed at $40,000 per month. The residual value of the equipment after 5 years is expected to be $200,000 based on the estimate of a certified valuer. In 2018 and 2020, Barakah Construction incurred repair costs due to mechanical default not due to the normal usage of the asset amounting to $50,000 and $40,000 respectively. Every year, Barakah Construction incurred routine maintenance costs due to wear and tear amounting to $20,000 per year on average. Required: (a) Prepare a profit statement to recognize the above ljara contract in the books of Bank Muslim for the five-year period based on Ijara Muntahia Bitamleek (IMB) through the Equivalent Value method as prescribed by AAOIFI FAS 8. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BI S Paragraph Arial 10pt ev TX % Q E X2 X2 & T Te + T 99 2 + EX F E H (1) V HI A P O WORDS POWERED BY TINY Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and Submit
