WAEC Accounting 2022 Objective — Question 32
Question 32 of 50 from the West African Examinations Council (WAEC) Accounting 2022 Objective paper, with the correct answer and a full explanation.
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Use the following information to answer questions 32 to 34. Teteh and Kukuma are in partnership with capital balances of N300,000 and N200,000 respectively. They agreed to share profit on the basis of their capital. The profit for the year is N150,000 and the interest on capital is 5%. Teteh's share of profit is
- A. N90,000
- B. N75,000Correct
- C. N60,000
- D. N50,000
Explanation
Interest on capital: Teteh = 5%×300,000=15,000; Kukuma = 5%×200,000=10,000; total = 25,000. Net profit after interest = 150,000−25,000 = 125,000, shared in the capital ratio 300,000:500,000. Teteh's share of the residual profit = (300,000/500,000)×125,000 = 75,000.
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