my friend's bonsai is looking pritty bad, no leaves, yellow coloured fungas on the trunk and soil of the pot. any tips on how to breath new life into it. or what other things I should lok out for?

A fungus will normally grow in shaded, moist areas, if this is the only problem, putting it in a sunny spot with plenty of air flow may help.

You may also need to repot it with new soil(bonsai mix)

Plenty of info in books and web if you are really interested.
Good luck.

I'm a person from Japan.. and bonsai do come from Japan!
I think you should cut off or somehow take off the yellow fungus. It might be taking the bonsai's needed nutrition. Then,
continue as you did before and see what happens. I don't know how your friend is treating the bonsai, so I can't really tell, but I think it needs more nutrition.

This website will help you out.

http://www.celestialbonsai.com/care.html