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WAEC SSCE - Financial Accounting - 2002 (Objective)

Question 1 Report

Use the following information to answer the given question,
\(\begin{array}{c|c} & Baba & Tude\\ & N & N \\ \hline \text{Capital Accounts 1 January, 2000} & 40,000 & 50,000\\ \text{Current Accounts 1 January, 2000} & 20,000Cr & 15,000Cr \\ \text{Drawings during the year} & 4,000 & 15,000\\ Salaries & 5,000 & 5,000\end{array}\)
Interest on capital is 10%, the net profit for the year is N40,000. The interest on Tunde's capital is
Answer Details
To calculate the interest on Tunde's capital, we need to multiply Tunde's capital balance at the beginning of the year by the interest rate. Tunde's capital balance at the beginning of the year is N50,000. So, the interest on Tunde's capital would be: N50,000 x 10% = N5,000 Therefore, the interest on Tunde's capital is N5,000. is the correct answer.
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