JAMB - Accounts Principles Of Accounts (2023 - No. 43)
Dairo and Segun are in partnership sharing profits and losses in the ratio 2:3 respectively. The information below relates to their business for the year ended 31st December, 2018.
|
Drawings: |
₦ |
| Dairo | 12000 |
| Segun | 18000 |
| Capital | |
| Dairo | 120000 |
| Segun | 60000 |
- Interest on drawings 10%
- Interest on capital 5%
- Profit for the year ₦36,000
- Salary: Segun ₦10,000
The interest on Dairo's drawings is
₦1,600
₦1,200
₦1,400
₦1,800
Explanation
The interest on Dairo's drawings is calculated by multiplying the amount of his drawings (₦12,000) by the interest rate on drawings (10%). This gives us ₦1,200.
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