L and M are in partnership, sharing profits and losses in the ratio of 3:2. They have the following current account balances. [Table with L $ and M $ for 31 March 2019 (3000 credit, 4500 debit) and 31 March 2020 (14200 credit, 6200 debit)] The balances at 31 March 2020 are after taking into account the following. [Table with L $ and M $ for interest on drawings (1000, 1500), interest on capital (3000, 2000), drawings (10000, 15000)] What was the residual profit to be shared between L and M for the year ended 31 March 2020?

Q: What topic does this question test?

This question tests Partnership Accounts in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Q: Which exam paper is this question from?

This question appeared in the Cambridge A-Level Accounting May/June 2020 examination, Paper 1 Variant 2 (9706_s20_qp_12.pdf).

Question

L and M are in partnership, sharing profits and losses in the ratio of 3:2. They have the following current account balances. [Table with L $ and M $ for 31 March 2019 (3000 credit, 4500 debit) and 31 March 2020 (14200 credit, 6200 debit)] The balances at 31 March 2020 are after taking into account the following. [Table with L $ and M $ for interest on drawings (1000, 1500), interest on capital (3000, 2000), drawings (10000, 15000)] What was the residual profit to be shared between L and M for the year ended 31 March 2020?

Oracle Prep · Accepted Answer

The correct answer is D: $32000.

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