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WAEC Financial Accounting 2005 Question 18

Question 18

Partnership Accounts

Capital Accounts: Ade N60,000; Bola N40,000
Current Accounts: Ade N10,000 Cr.; Bola N6,000 Dr.
Drawings: Ade N8,000; Bola N2,000
Interest on drawings is 5%, interest on capital is 10%. Profits and losses are shared equally. Net profit for the year is N30,000.
Bola's current account balance is

  1. A.N18,150 Cr.
  2. B.N16,150 Cr.
  3. C.N10,150 Cr.
  4. D.N6,150 Cr.
Show the answer and explanation

Answer: D (N6,150 Cr.)

Explanation

−6,000 + interest 4,000 + share 10,250 − drawings 2,000 − interest on drawings 100 = N6,150 Cr.