WAEC Accounting 2014 Paper

Concept:The divisible profit is the profit available for sharing after adding interest on drawings to the net profit and deducting interest on capital.Explanation:Given: Profit for the year is Le 12,000.Total capital of Aye and Bee $= 20{,}000 + 30{,}000 = 50{,}000$.Interest on capital at $6\%$ $= 6\% \times 50{,}000 = 3{,}000$.Total drawings $= 8{,}000 + 2{,}000 = 10{,}000$.Interest on drawings at $10\%$ $= 10\% \times 10{,}000 = 1{,}000$.Divisible profit $= \text{Profit} + \text{Interest on drawings} - \text{Interest on capital}$.Divisible profit $= 12{,}000 + 1{,}000 - 3{,}000 = 10{,}000$.The profit-sharing ratio of capital is not needed for this computation.Answer:Le 10,000 (Option C).