Mazin and Marwan commenced business as partners on Jan 1, 2020. They contributed RO 60,000, RO 40,000 as their share of capital. The partners decided to share their profits in the ratio of 4:2. Interest on capital was to be provided @ 7.5% p.a. The profits of the firm after providing salary and interest on capital were RO 40,000. Calculate Interest on Capital of Mr Mazin? a. 4500 b. 13333.33 c. 2800 d. 26666.66
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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