WAEC Accounting 2014 Objective — Question 32

Question 32 of 50 from the West African Examinations Council (WAEC) Accounting 2014 Objective paper, with the correct answer and a full explanation.

Aye and Bee's capital were Le20,000 and Le30,000 respectively; drawings Le8,000 and Le2,000; profit for the year Le10,000; interest on capital 6%, interest on drawings 10%, profit shared in the ratio of capital. The divisible profit is

A. Le14,000
B. Le12,000
C. Le10,000
D. Le8,000Correct

Explanation

Divisible profit = Profit for the year + interest on drawings − interest on capital = 10,000+1,000−1,200−1,800 = Le8,000.

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