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JAMB Principles of Accounts 2009 Question 40

Question 40

Partnership Accounts

Given:
Capital balances b/d: P ₦20,000; K ₦10,000
Drawings: P ₦2,000; K ₦1,000
Share of profits: P ₦4,000; K ₦2,000
Salary: P ₦1,000
Interest on drawings: P ₦100; K ₦20
Assuming that the partnership maintains a fixed capital, what is P's closing capital?

  1. A.₦25,000
  2. B.₦24,900
  3. C.₦22,900
  4. D.₦20,000
Show the answer and explanation

Answer: D (₦20,000)

Explanation

With fixed capitals, drawings, profits, salary and interest go to the current account, so the capital stays at ₦20 000.