On January 1, 2020, Psyche and Trim started a coffee Psyche invested $40,000 cash and Trim invested $20,000 cash. In the first year of trade, the business made profit of 25,000.

The partnership agreement was as follows:

Each partner is to receive a salary of $5,000 per annum.

Interest on capital is to be provided at 5% per annum.

Interest on drawings to be charged at 2% per annum.

The balance of profit is to be split in the ratio 3:2

On July 1, 2020, Psyche and Trim withdrew $5,000 and $4,000 (respectively) from the business to pay for their annual holiday trip.

Calculate:

i. The total interest to be charged on drawing for each partner (3 marks)

ii. The share of profit for each partner (2 marks)