Use the following information to answer the question below Ajem and Ogah were in partnership sharing profits and losses in the ratio 2:3. Interest on capita...

Answer Details

First, we need to calculate the interest on capital for both partners. Interest on Ogah's capital = 5% of 60,000 = 3,000 Interest on Ajem's capital = 5% of 65,000 = 3,250 Next, we need to calculate the interest on their drawings. Interest on Ogah's drawings = 3% of 20,000 = 600 Interest on Ajem's drawings = 3% of 30,000 = 900 Now, we can calculate the total amount of interest for each partner by adding the interest on their capital and the interest on their drawings. Total interest for Ogah = 3,000 + 600 = 3,600 Total interest for Ajem = 3,250 + 900 = 4,150 We can now calculate the adjusted capital for each partner by adding their capital account, current account balance, and subtracting their drawings and the interest on their drawings. Adjusted capital for Ogah = 60,000 + 40,000 - 20,000 - 600 = 79,400 Adjusted capital for Ajem = 65,000 + 50,000 - 30,000 - 900 = 84,100 The total adjusted capital for the partnership is the sum of the adjusted capital for both partners. Total adjusted capital = 79,400 + 84,100 = 163,500 Now, we can calculate each partner's share of the profit. Ogah's share of the profit = (2 / 5) x (100,000 - 10,000 - 3,600) = 51,150 Ajem's share of the profit = (3 / 5) x (100,000 - 10,000 - 4,150) = 48,850 Therefore, the answer is option A - 51,150.