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JAMB Principles of Accounts 2000 Question 40

Question 40

Partnership Accounts

Use 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.
Assuming that Rakiya was not credited with any income during the period, what is her closing current account balance?

  1. A.₦340.00 credit
  2. B.₦349.75 debit
  3. C.₦500.00 credit
  4. D.₦511.25 debit.
Show the answer and explanation

Answer: D (₦511.25 debit.)

Explanation

Interest: 200 × 5% × 9/12 = 7.50; 300 × 5% × 3/12 = 3.75. Debits = 500 + 11.25 = ₦511.25 debit.