Dairo and Segun are in partnership sharing profits and losses in the ratio 2:3 respectively. The information below relates to their business for the year en...
Question 1 Report
Dairo and Segun are in partnership sharing profits and losses in the ratio 2:3 respectively. The information below relates to their business for the year ended 31st December, 2018.
| Drawings: | ₦ |
| Dairo | 12000 |
| Segun | 18000 |
| Capital | |
| Dairo | 120000 |
| Segun | 60000 |
- Interest on drawings 10%
- Interest on capital 5%
- Profit for the year ₦36,000
- Salary: Segun ₦10,000
The interest on Dairo's drawings is
Answer Details
To calculate the interest on Dairo's drawings, we need to find out the total drawings made by Dairo during the year.
Dairo's drawings: ₦12,000
Now, let's calculate the interest on Dairo's drawings using the formula:
Interest on Drawings = Drawings * Rate of Interest
Given: Rate of Interest = 10%
Interest on Dairo's drawings = ₦12,000 * 10% = ₦1,200
Therefore, the interest on Dairo's drawings is ₦1,200.
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