Question

contemporary issues in accounting :

the chapter about Sukuk.

• Show by a practical example a Sukuk Al Mudaraba - Sukuk based on “equity partnership”
• The example should be simple and contain practical information such as:
  • Number of partners in the sukuk agreement
  • Brief description of the business project to be undertaken
  • The duration of the business project
  • Share of profit and loss basis amongst the partners
  • A practical example of a project - Fill in the following and devise the share of the profit or loss for BOTH scenarios:

FILL-IN the table below:

Scenario A
Partnership results for Dec 2019	Calculation	AED
Number of items sold	12,400
Price per item	AED120
Cost of Goods sold 70% of sales
Expenses:
Approximately 15% of Sales
Profit
Profit/Loss share:	Partner 1: 55%
	Partner 2: 45%
Scenario B
Partnership results for Dec 2019	Calculation	AED
Number of items sold	12,400
Price per item	AED 80
Cost of Goods sold 70% of sales
Expenses:
Approximately 25% of Sales
Profit
Profit/Loss share:	Partner 1:55%
	Partner 2:45%

Answer 1

Scenario A

Partnership results for Dec2019		Calculation	AED
Number of Items sold	12400
Price per Item	AED120
Sales		12400*120	14,88,000.00
Cost of Goods Sold		1488000*70%	10,41,600.00
Expenses		1488000*15%	2,23,200.00
Profit			2,23,200.00
Profit/Loss Share	Partner 1	223200*55%	1,22,760.00
	Partner 2	223200*45%	1,00,440.00

Scenario B

Partnership results for Dec2019		Calculation	AED
Number of Items sold	12400
Price per Item	AED80
Sales		12,400*80	9,92,000.00
Cost of Goods Sold		992,000*70%	6,94,400.00
Expenses		992,000*25%	2,48,000.00
Profit			49,600.00
Profit/Loss Share	Partner 1	49,600*55%	27,280.00
	Partner 2	49,600*45%	22,320.00