WAEC Financial Accounting 1993 Question 31

Question 31

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

The balance on Johnson's current account is

  1. A.₦3,300 CR
  2. B.₦2,200 CR
  3. C.₦1,300 CR
  4. D.₦800 DR
  5. 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.