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WAEC Accounting 2020 Paper

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Question : 12

Total: 40

Use the following information to answer the question below

Ata. Bubu and Chikum were in partnership sharing profits and losses in proportion to their capital contributions:

N90,000
N40,500
N36,000
N27,500

Solution:

Concept:

Partnership profits are shared in proportion to each partner's capital contribution.

Explanation:

The capital ratio is Ata : Bubu : Chikum

= 3 : 2 : 1

.

Total ratio parts

= 3 + 2 + 1 = 6

.

Bubu's share of profit is

\frac{\text{Bubu's capital}}{\text{Total capital}} \times \text{Net profit}

.

So, Bubu's fraction

= \frac{2}{6} = \frac{1}{3}

.

Net profit

= \mathrm{N}121{,}500

.

Bubu's share

= \frac{1}{3} \times \mathrm{N}121{,}500 = \mathrm{N}40{,}500

.

This matches option B.

Answer:

B. N40,500

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