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JAMB Principles of Accounts 2009 Question 39

Question 39

Partnership Accounts

Given:
Net profit b/d ₦10,000
Interest on capital: M ₦2,000; K ₦1,000
Partners' salary: K ₦800
Interest on drawings: M ₦500
Profit sharing ratio M and K 3:2
Determine M's share of profit

  1. A.6,280
  2. B.4,020
  3. C.2,820
  4. D.2,280
Show the answer and explanation

Answer: B (4,020)

Explanation

Residual profit = 10 000 + 500 − 2 000 − 1 000 − 800 = ₦6 700. M's share = 3/5 × 6 700 = ₦4 020.