WAEC Financial Accounting 2019 Question 26

Question 26

Partnership Accounts

Use 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

  1. A.GH¢51,150.
  2. B.GH¢50,250
  3. C.GH¢34,100.
  4. 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.