Capital balances b/d:…..P………….N20,000
……………………..K………….N10,000
Drawings:……………..P………….N2, 000
……………………..K………….N1, 000
Share of profits:………K………….N4, 000
……………………..K………….N2, 000
Salary………………..P………….N1, 000
Interest on drawings:…..K………….N100
……………………..K………….N20
A. N25,000
B. N24,900
C. N22,900
D. N20,000
Correct Answer:
Option D – N20,000
Explanation
Assuming the partnership maintains a fixed capital balance P capital would be the balance brought down 20,000 (that is capital without drawings)
