Company A has entered into a mudarabah contract with Islamic Bank in which the company provides monetary capital of 3,000,000 to be managed and invested by the Bank. The Bank provides Mudarabah Al-Muqayadah 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 B who had agreed to invest 2,000,000. The profit sharing between three of them is 2:1:1 for Company A, Company B and Islamic Bank, respectively.

Islamic Bank then entered into another mudarabah contract (re-Mudarabah) with company C to undertake a housing development project and they had agreed on the profit sharing of 80:20 (Islamic bank : Company C). Islamic Bank had agreed to contribute 5,000,000 as monetary capital based on three-year mudarabah financing contract. Assume the following results the venture:

Year	Profit / Loss
1	800,000
2	(700,000)
3	2,000,000

Required: Apply the sharia standard AAOIFI FAS 3 to determine the profit or loss will be allocated for all parties based on each period

Answer rating: 100% (QA)

ANSWER A profit and loss statement is calculated by taking a companys total revenue and subtracting ... View the full answer