JAMB Accounts Principles of Accounts 2018 Paper

Concept:Interest on drawings is the amount charged to partners on money taken for personal use.It is calculated using the rate and the period the money was withdrawn during the year.Explanation:Joy withdrew two amounts in the year.Use the formula $I = \text{Amount} \times \frac{5}{100} \times \frac{\text{Months}}{12}$.First, ₦100 was drawn on April 1.From April 1 to December 31 is 9 months.Interest $= 100 \times \frac{5}{100} \times \frac{9}{12} = 3.75$.So Joy owes ₦3.75 on the first drawing.Next, ₦240 was drawn on July 1.From July 1 to December 31 is 6 months.Interest $= 240 \times \frac{5}{100} \times \frac{6}{12} = 6.00$.So Joy owes ₦6.00 on the second drawing.Total interest on Joy's drawings $= 3.75 + 6.00 = 9.75$.Answer:The correct option is D, which is ₦9.75.