| |
|
Agreed Ratio
For Profit
Sharing |
Rupees |
|
A)
|
Client’s investment
|
70% |
Rs. 100 |
|
B)
|
Institution’s investment
|
30% |
Rs. 100 |
|
C)
|
Total Investment (A+B) |
|
Rs. 200 |
|
D)
|
Agreed Projected Rate of Return on
Total Investment |
60% |
|
|
E)
|
Projected amount of Profit on total
investment |
|
Rs. 120 |
|
F)
|
Allocation of Projected Profit in
mutually agreed profit sharing
|
|
|
|
|
|
|
|
|
|
Ratio of: |
|
|
|
|
Client |
70% |
Rs. 84 |
|
|
Institution |
30% |
Rs. 36 |
|
|
Projected Total Profit |
|
Rs. 120 |
|
G)
|
Quarterly provisional payment of
projected Profit 36/4 = Rs. 9 per quarter |
|
|
|
H)
|
Allocation of actual net profit of
Rs. 160 on year end: |
|
|
|
|
Client |
70% |
Rs. 112 |
|
|
Institution |
30% |
Rs. 48 |
|
|
Actual Total Profit |
|
Rs. 160 |
|
I)
|
Therefore, final net payment to the
Institution will be Rs. 12 (Rs. 48 - Rs. 36) |
|
|
