Charlie and Daphne are in partnership, sharing profits and losses in the ratio 2 : 1. Their fixed capital account balances at 31 December 2019 were $20 000 and $13 000 respectively.
They changed the terms of the partnership on 1 January 2020 to introduce interest on capital at the rate of 10% per annum.
Which effect did this change have on Charlie’s total share of profit for the year ended 31 December 2020?
decrease of $200
2 )
decrease of $700
3 )
increase of $200
4 )
increase of $700
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