WAEC Accounting 2015 Paper

Concept:Interest on drawings is added back to the net profit to find the divisible profit for partners.Explanation:First, calculate interest on each partner's drawings. Ade's interest on drawings $= 5\% \times \mathrm{N}10{,}000 = \mathrm{N}500$. Bola's interest on drawings $= 5\% \times \mathrm{N}15{,}000 = \mathrm{N}750$. Total interest on drawings $= \mathrm{N}500 + \mathrm{N}750 = \mathrm{N}1{,}250$. The net profit for the year is $\mathrm{N}4{,}250$. Since interest on drawings is an income to the firm, it is added back to the net profit. Divisible profit $= \mathrm{N}4{,}250 + \mathrm{N}1{,}250 = \mathrm{N}5{,}500$. Profit is shared equally between Ade and Bola. Ade's share $= \mathrm{N}5{,}500 \div 2 = \mathrm{N}2{,}750$.Answer:C. $\mathrm{N}2{,}750$