WAEC - Accounts Principles Of Accounts (2023 - No. 9)
Use the following information to answer the question
Ant and Bee withdrew GH⊄ 14,000 and GH⊄ 10,000 respectively at 8% per annum from the partnership.
The total interest on drawings to be charged to profit and loss appropriation account is
Ant and Bee withdrew GH⊄ 14,000 and GH⊄ 10,000 respectively at 8% per annum from the partnership.
The total interest on drawings to be charged to profit and loss appropriation account is
GH⊄ 1,120
GH⊄ 1,920
GH⊄ 700
GH⊄ 800
Explanation
To calculate the interest on Ant's withdrawal:
Interest on Ant's Drawings = Ant's Withdrawal x Interest Rate
Interest on Ant's Drawings = GH⊄ 14,000 x 8% = GH⊄ 1,120
To calculate the interest on Bee's withdrawal:
Interest on Bee's Drawings = Bee's Withdrawal x Interest Rate
Interest on Bee's Drawings = GH⊄ 10,000 x 8% = GH⊄ 800
Total Interest on Drawings = Interest on Ant's Drawings + Interest on Bee's Drawings
Total Interest on Drawings = GH⊄ 1,120 + GH⊄ 800 = GH⊄ 1,920
Interest on Ant's Drawings = Ant's Withdrawal x Interest Rate
Interest on Ant's Drawings = GH⊄ 14,000 x 8% = GH⊄ 1,120
To calculate the interest on Bee's withdrawal:
Interest on Bee's Drawings = Bee's Withdrawal x Interest Rate
Interest on Bee's Drawings = GH⊄ 10,000 x 8% = GH⊄ 800
Total Interest on Drawings = Interest on Ant's Drawings + Interest on Bee's Drawings
Total Interest on Drawings = GH⊄ 1,120 + GH⊄ 800 = GH⊄ 1,920
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