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WAEC Financial Accounting 2000 Question 7

Question 7

Partnership Accounts

Williams and Jacob are in partnership but there is no partnership agreement. The capital contributed are N60,000 and N40,000 respectively. Profit for the year is N20,000. Interest on capital is 10%.
What is Jacob's share of profit?

  1. A.N10,000
  2. B.N8,000
  3. C.N5,000
  4. D.N4,000.
Show the answer and explanation

Answer: C (N5,000)

Explanation

The residual profit of N10,000 is shared equally, so Jacob's share is N5,000.