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JAMB Principles of Accounts 1997 Question 36

Question 36

Partnership Accounts

Adamu, Babaji and Chukwu are in partnership and they share profit and losses on ratio 3:2:1. Their respective capitals are ₦20 000, ₦15 000 and ₦5 000 on which they are entitled to interest at 5% per annum. The profit for the year before charging interest on capital amounted to ₦5 500. Calculate the profit for Adamu.

  1. A.₦583
  2. B.₦1 000
  3. C.₦1 167
  4. D.₦1 750
Show the answer and explanation

Answer: D (₦1 750)

Explanation

Interest = 1 000 + 750 + 250 = 2 000. Remaining profit = 5 500 − 2 000 = 3 500. Adamu's share = 3/6 × 3 500 = ₦1 750.