WAEC Financial Accounting 1993 Question 27

Question 27

Partnership Accounts

John and Johnson are in partnership, sharing profit and losses in the ratio 3:2. Other information are as follows:
Capital: John ₦20,000; Johnson ₦10,000
Drawings: John ₦2,000; Johnson ₦3,000
Interest on capital: 5%
Interest on drawings: 10%
Profit: ₦6,000

Interest on John's drawings is

  1. A.₦500
  2. B.₦300
  3. C.₦200
  4. D.₦150
  5. E.₦100.
Show the answer and explanation

Answer: C (₦200)

Explanation

10% × 2,000 = ₦200.