WAEC Financial Accounting 1993 Question 28

Question 28

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

What is John's share of the profit?

  1. A.₦5,000
  2. B.₦3,600
  3. C.₦3,000
  4. D.₦2,400
  5. E.₦2,000
Show the answer and explanation

Answer: C (₦3,000)

Explanation

6,000 + interest on drawings 500 − interest on capital 1,500 = 5,000; John gets 3/5 = ₦3,000.