| |
|
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 |
|
|
|
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 |
|
Rs. 112 |
|
Institution |
|
Rs. 48 |
| |
|
|
Rs. 160 |
I) |
Therefore, final net payment to the Institution will be Rs. 12 (Rs. 48 - Rs. 36) |
|
|