ACCA FA2 PARTNERSHIP INTEREST
Malik and Vasha are in partnership. The partnership agreement provides for interest on capital to be paid at a rate of 11% per annum.
You have the following information:
| Malik | Vasha | |
| $ | $ | |
| Capital Balance at 1 Nov 2010 | 70,000 | 60,000 |
| Capital Introduced on 1 April 2011 | 8,000 | 8,000 |
What is the total value of interest on capital for the year to 31 October 2011?
Suggested Solution.
| Malik | Vasha | Total | |
| $ | $ | $ | |
| Capital Balance at 1 Nov 2010 | 70,000 | 60,000 | 130,000 |
| Capital Introduced on 1 April 2011 | 8,000 | 8,000 | 16,000 |
| Total | Interest | |
| One year interest at 11% | 130,000 | 14,300.00 |
| 7 months' interest at 11% | 16,000 | 1,026.67 |
| Answer | 15,326.67 |
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