. Zaid was doing business. There was an amount of 900 Dollars that was due to him. It as scheduled to reach him after a few days/ weeks. This 900 was all his profits from his business.
Ahmad got into a partnership with him in this way that he invested equally by giving him 900 Dollars. They mutually agreed that 70% of the profits will go to Zaid and 30 % to Ahmad , since Ahmad is a silent partner. All the work is done by zaid.
After one year , the business has a total of 2750 Dollars as profit. Both want to terminate this. How do they calculate their portions.
Do we first give Ahmad his 900 (capital) and then divide the balance 70% and 30% ?? Or do we first divide the profits 70/30% and thereafter, zaid pays Ahmad the initial 900??
Also noteworthy, is that Zaid initially had nothing. He was awaiting his amount of 900. When Ahmad invested 900 , Zaid did not use the 900 primarily in the business only. He used part of it in the business and the balance on himself and his family…knowing that he is going to “put back” later on.
There is some more clarity on on the below mentioned earlier question that might be important.
After Zaid recieved his original amount of 900 dollars, he included it into the partnership. Then it is noteworthy here , that Zaid did not exclusively use the capital (1800 dollars) for the business. He used those funds for many of his personal needs , as well as the business. When profits of the business would come in , then those profit amounts would be kept aside. (The profits did not go back into the business) Like this , it continued…. Now, because Zaid was also using the capital for his own needs, then this capital gradually became lesser and lesser…
Eventually, like currently, the capital is finished. The 2750 is all the profits that had been kept aside. Now they want to terminate.