FA – May 2014 – L1 – SA – Q15 – Partnership Account

Calculates a partner's share of profit based on given ratios.

Question

A, B, and C are in partnership sharing profits in the ratio of 5:4:2, respectively. In the year ended 31 March 2013, C’s share of profit was N180,000. What is A’s share of profit for the year?
A. N360,000
B. N400,000
C. N450,000
D. N550,000
E. N600,000

Answer

Explanation:
The correct answer is C because A’s share can be calculated using the given profit-sharing ratio. If C’s share (ratio 2) equals N180,000, the total ratio is 5 + 4 + 2 = 11. Each ratio unit is N180,000 ÷ 2 = N90,000. Therefore, A’s share is 5 × N90,000 = N450,000.

Tags: Accounting Calculations, Partnership, Profit Sharing, Ratios
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2014

Uploader: Theophilus