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 | 80,000 | 60,000 |
| Capital Introduced on 1 April 2011 | 1,000 | 7,000 |
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 | 80,000 | 60,000 | 140,000 |
| Capital Introduced on 1 April 2011 | 1,000 | 7,000 | 8,000 |
| Total | Interest | |
| One year interest at 11% | 140,000 | 15,400.00 |
| 7 months' interest at 11% | 8,000 | 513.33 |
| Answer | 15,913.33 |
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