Adan Berhad and Hasina Berhad entered into a Mudarabah Muqayyadah investment contract with Bank Misbah with an investment of RM6,000,000 and RM4,000,000 respectively. The Mudarabah account will invest in a specific project as agreed by the client. They have agreed with profit sharing ratio of 3:2:1 for Adan, Hasina and the Bank respectively.

Bank Misbah then entered into a Re-Mudarabah contract with Nafisa International to undertake a property development project. Bank Misbah agreed to contribute the RM10,000,000 as capital based on a four-years restricted mudarabah (Mudarabah Muqayyadah) financing contract. The pre-determined profit sharing ratio was 60:40 (Bank: Nafisa).

The returns of the project are as follows:

Year	Profit / Loss	RM
1	Loss	500,000
2	Profit	2,700,000
4	Loss	920,000
3	Profit	5,750,000

3. Calculate the profit allocation between the Capital Providers, Bank and the Mudarib assuming profit is recognised under Each Period Method.

4. Prepare the journal entries in the book of Bank Misbah to record:

1. Contribution of capital in the Mudarabah Financing.

1. Offsetting of loss in Mudarabah Financing for year 1

1. Profit received from Mudarib in Year 2