QUIZ Name Saddla AedudmaaID | 23402 u I … Company X has entered into a Mudharaba
ID: 2791334 • Letter: Q
Question
QUIZ Name Saddla AedudmaaID | 23402 u I … Company X has entered into a Mudharabah contract with Sharjah Islamic Bank(SIB) in which the company provides monetary capital of 600,000 to be managed and invested by the Bank. Bank provides Mudharabah Al-Mutlagah investment account facility whereby the Bank will invest in a specific project as agreed by the client. For this project there is another investor, Company Y who had agreed to invest 300,000. The profit sharing between three of them is 2:1:1 for Company X, Company Y and the Bank respectively. Sharjah Islamic Bank(SIB) then entered into another Mudharabah contract (Re-Mudharabahy) with Company C to undertake a new project and they had agreed on the profit sharing ratio of 60:40 (Bank: Company C) DIB had agreed to contribute the 900,000 as monetary capital based on a three-year Mudharabah financing contract (Mudharabah muqayaddah). The project was executed but we don't know what the results for years were, but we know that company X suffered loss of (100,000) in the first year. Similarly, we know that C made a profit of 50,000 in th second year. Required: QI. (A): What was profit or loss in the first year of operations? (4.marks) (B) What was the profit or loss in the second year (3 marks) NB: Show all your calculationsExplanation / Answer
1st year:
Profit sharing 2:1:1
Let the total profit be x
Hence, share of Y=x*1/(2+1+1)=x/4
Given, share of Y=-100000
Hence, x=-400000
So, total loss in 1 st year=400000
2nd year:
Profit sharing 60:40
Let the total profit be x
Hence, share of C=x*40/(40+60)=0.4x
Given, share of C=50000
Hence, x=50000/0.4=125000
So, total profit in 2nd year=125000