Paper 2 · November 2024 · Partnership current accounts and statement of financial position
Hove and Midzi's capital accounts were $80 000 each on 1 January 2020, with interest on capital allowed at 10% per annum. Calculate the total interest on capital for both partners for the year ended 31 December 2020.
Model answer
$16 000
Also accepted: 16000, 16 000
Explanation
10% x (80 000+80 000) = $16 000 (Hove $8 000 + Midzi $8 000).
Derived from ZIMSEC Principles of Accounting 4051/2 Paper 2, November 2024, Q1