Ms. Suello is entitled to 10% interest on the weighted average balance of her capital account. Ms. Suello's capital had a balance of P160 on Jan. 1. Ms. Suello invested additional P100 on July 1 and withdrew P40 on Sept. 30. The interest on Ms. Suello's capital is P20.

Answer:

The Statement is True.

Calculation of Weighted Average Capital

Jan 01 - opening balance P160 * 12/12 = P160

July 01 - Addition made P100 * 6/12 =P50

Sept 30 - Withdrawl of capital P40 * 3/12   =(P10)

Weighted Average Cost of Capital = 160 + 50 - 10

= P 200

Interest @ 10% on Weighted Average Capital = 200*10%

=P20

And hence the statement is true.