Tamaam Islamic Bank made a five-year Mudaraba investment on January 12, 2023. The total Mudaraba investment capital
Question:
Tamaam Islamic Bank made a five-year Mudaraba investment on January 12, 2023. The total Mudaraba investment capital provided by the bank was USD 200,000. On liquidation, only USD 160,000 could be recovered. The loss was due to normal business factors.
How will the bank recognise the transaction at the time of liquidation of the Mudaraba contract?
a. Debit: Cash = USD 200,000, Credit: Mudaraba Capital = USD 200,000
b. Debit: Cash = USD 160,000, Mudaraba loss = USD 40,000, Credit: Mudaraba Capital = USD 200,000
c. Debit: Cash = USD 160,000, Mudaraba Receivable = USD 40,000, Credit: Mudaraba Capital = USD 200,000
d. Debit: Cash = USD 160,000, Credit: Mudaraba Capital = USD 160,000
Step by Step Answer:
Financial Reporting For Islamic Financial Institutions Accounting Standards Interpretation And Application
ISBN: 9781032464022
1st Edition
Authors: Abdul Rauf Mahar, Ayesha Bhatti, Muhammad Junaid Ashraf, Asfand Zubair Malik