Use the following information to answer the given question. John and Johnson are in partnership, sharing profit and losses in the ratio 3 : 2. Other informa...

To calculate the interest on Johnson's capital, we need to first determine the amount of his capital in the business. From the given information, we know that Johnson's capital is N10,000. Next, we need to calculate the interest on his capital at a rate of 5%. To do this, we can use the simple interest formula: Interest = (Principal x Rate x Time)/100 Here, the principal is the amount of Johnson's capital, which is N10,000. The rate is 5%, and we need to convert it to a decimal by dividing by 100, giving us 0.05. The time is not given explicitly, but we can assume that it is for the entire year, as this is a standard assumption in accounting. Therefore, the time is 1 year. Substituting these values into the formula, we get: Interest = (10000 x 0.05 x 1)/100 = N500 Therefore, the interest on Johnson's capital is N500. Answer (E) is correct. In summary, we calculated the interest on Johnson's capital by using the simple interest formula, which takes into account the principal, rate, and time. We assumed that the time was for the entire year and found that the interest on Johnson's capital was N500.