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JAMB Principles of Accounts 2005 Question 42

Question 42

Partnership Accounts

Use the information below to answer questions 42 and 43.
Jide and Haruna contribute ₦12 000 each as capital and share profit equally. Jide draws ₦1 500 and Haruna ₦1 700 half-yearly. The profit for the year is ₦10 000. Jide receives a salary of ₦2 000.
Calculate the profit available for appropriation

  1. A.₦12 000
  2. B.₦10 000
  3. C.₦8 000
  4. D.₦7 000
Show the answer and explanation

Answer: B (₦10 000)

Explanation

The appropriation account starts with the net profit of ₦10 000. From it Jide's salary of ₦2 000 is appropriated and the remaining ₦8 000 is shared equally.