Question 31
Partnership AccountsJohn 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
The balance on Johnson's current account is
- A.₦3,300 CR
- B.₦2,200 CR
- C.₦1,300 CR
- D.₦800 DR
- E.₦500 DR.
Show the answer and explanation
Answer: D (₦800 DR)
Explanation
Interest 500 + share 2,000 − drawings 3,000 − interest on drawings 300 = −800, a debit of ₦800.