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WAEC Financial Accounting 2003 Question 14

Question 14

Partnership Accounts

Capital Accounts: Ojo N40,000; Aina N20,000
Drawings: Ojo N10,000; Aina N6,000
Interest on capital 5%
Interest on drawings 10%
Net profit for the year N30,000
Profit sharing ratio: Ojo 2/3, Aina 1/3
The divisible profit for the year is

  1. A.N31,600
  2. B.N31,400
  3. C.N904,000
  4. D.N28,600
Show the answer and explanation

Answer: D (N28,600)

Explanation

30,000 − interest on capital 3,000 + interest on drawings 1,600 = N28,600.