JAMB Accounts Principles of Accounts 2015 Paper

Concept:Compute the profit remaining after salaries and interest on capital, then share it in the profit-sharing ratio.Explanation:Net profit $= \mathrm{N}80,000$Total salaries $= 10,000 + 15,000 = \mathrm{N}25,000$Interest on capital: $\mathrm{N}40,000 \times 5\% = \mathrm{N}2,000$ and $\mathrm{N}70,000 \times 5\% = \mathrm{N}3,500$Total interest on capital $= 2,000 + 3,500 = \mathrm{N}5,500$Residual profit $= 80,000 - 25,000 - 5,500 = \mathrm{N}49,500$Osinbajo’s share $= 60\% \times 49,500 = \mathrm{N}29,700$Drawings are not deducted when calculating profit share.Answer:$\mathrm{N}29,700$, Option D.