Question 39
Partnership AccountsUse the information below to answer questions 39 and 40.
Rakiya and Joy are in partnership and agreed that 5% interest per annum is to be charged on drawings. The drawing made by both partners in one year were: Rakiya, ₦200 on March 31 and ₦300 on September 30. Joy, ₦100 on April 1 and ₦240 on July 1.
The interest on Joy's drawing is
- A.₦6.00
- B.₦7.25
- C.₦9.00
- D.₦9.75
Show the answer and explanation
Answer: D (₦9.75)
Explanation
₦100 for 9 months: 100 × 5% × 9/12 = 3.75. ₦240 for 6 months: 240 × 5% × 6/12 = 6.00. Total ₦9.75.