Company A has entered into a mudharabah contract with Bank Shariah in which the company provides monetary capital of RM1,000,000. Company B who had agreed to invest RM1,000,000. The profit sharing between three of them is 1:1:1 for Company A, Company B and the Bank respectively.

Bank Shariah entered into another mudharabah contract with Company C to undertake a housing development project. Banks contribution in this project was RM2,000,000 and they had agreed on the profit-sharing ratio of 80 : 20 (Bank : Company C).

Assume the following results of the venture:

Year Profit / (Loss)

1 (750,000)

2 700,000

3 1,500,000

You are required to:

i- Determine the profit/loss of the above transactions. Show how profit/loss will be allocated for all parties involved. ii- Prepare accounting entries and T-accounts for URIA and Mudarabah financing.