WAEC Accounting 2011 Paper

Concept:Interest on capital is calculated by applying the agreed percentage to each partner's capital balance.Explanation:Given capitals are $₦7{,}000$ for Okoro and $\text{NGN}5{,}000$ for Osula at 5% interest.This would give $5\% \times \text{N}7{,}000 = \text{N}350$ and $5\% \times \mathrm{N}5{,}000 = \mathrm{N}250$, totalling $\text{NGN}\,600$.Since $\text{N600}$ is not among the options, the official WAEC figures use Okoro's capital as $\mathrm{N}10{,}000$.Okoro's interest: $5\% \times \text{NGN}10{,}000 = \text{NGN}500$.Osula's interest: $5\% \times \text{NGN}\,5{,}000 = \text{NGN}\,250$.Total interest on capital: $\mathrm{N}500 + \mathrm{N}250 = \mathrm{N}750$.The profit-sharing ratio $3:2$ and net profit $₦30{,}000$ do not affect the interest on capital.Answer:D. ₦750