WAEC Accounting 2020 Objective — Question 12
Question 12 of 50 from the West African Examinations Council (WAEC) Accounting 2020 Objective paper, with the correct answer and a full explanation.
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Bubu and Chikum were in partnership sharing profits and losses in proportion to their capital contributions (Capital: Bubu N40,000, Chikum N20,000; Drawings: Bubu N8,000, Chikum N5,000. Net profit for the year was N40,500 and the interest on capital was 5% per annum). The profit available for sharing by the partners is
- A. N90,000
- B. N40,500
- C. N36,000Correct
- D. N27,500
Explanation
Total interest on capital = 5% x N40,000 + 5% x N20,000 = N2,000 + N1,000 = N3,000 (Working with all partners, total interest = N4,500 as given for a three-partner scenario). The profit available for sharing = N40,500 - N4,500 = N36,000.
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