Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

Under the partnership agreement between X and Y, interest on capital was to be worked out at $10\%$ per annum. At the start of the year on 1 January, the balances on X’s accounts stood at: capital $50\,000$, current $2000$ debit. On 1 July, X introduced further capital of $20\,000$. By 31 December, X’s current account balance was $20\,500$ credit. He had taken no drawings. What was X’s portion of the residual profit for the year?

  • A$12\,500$
  • B$15\,500$
  • C$16\,500$
  • D$17\,500$

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