Use the following information to answer the given question

Ade

N

Okon

N

Fixed Capital 15,000 25,000
Salary per annum 6,000 8,000
Interest on capital per annum 8% 8%
Profit or loss sharing ratio 40% 60%

 

The net profit for the year ended 31st December 1990 is N28,000 while drawing are N3,000 and N4,000 for Ade and Okon respectively. What is the profit available for distribution?

A. N17,800
B. N14,000
C. N10,800
D. N7,000
E. N3,800

Correct Answer:

Option C – N10,800

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