Question 26
Partnership AccountsUse the following information to answer questions 26 to 28.
Ajem and Ogah were in partnership sharing profits and losses in the ratio 2:3. Interest on capital and drawings were 5% and 3% respectively. The following details relate to the partnership for the year 2017. (Ajem / Ogah)
Capital Account: GH¢60,000 / GH¢65,000
Current Account: GH¢40,000 / GH¢50,000
Drawings: GH¢20,000 / GH¢30,000
Salary: GH¢10,000 / ---
Net profit was GH¢100,000.
Ogah's share of profit was
- A.GH¢51,150.
- B.GH¢50,250
- C.GH¢34,100.
- D.GH¢33,500.
Show the answer and explanation
Answer: A (GH¢51,150.)
Explanation
Residual = 100,000 − interest on capital 6,250 + interest on drawings 1,500 − salary 10,000 = 85,250; Ogah 3/5 = GH¢51,150.