Use the following information to answer this question.
Taiyelolu and Ejire are partners sharing profits or losses equally. Extracts from their books showed:
Taiyelolu Ejire
# #
Capital accounts (1/1/2023) 200,000 100,000
Current accounts (1/1/2023) 40,000 80,000
Drawings within the year 20,000 30,000
Annual salaries 28,000 24,000
Interest on capital is agreed at 10% and the net profit for the year is # 120,000.
Ejire's share of profit is
Appropriation account
# #
120,000
Net profit
Less: interest on capital
Taiyelolu 10% x #200,000 20,000 (30,000)
Ejire 10% x #100,000 10,000 90,000
Annual salaries:
Taiyelolu 28,000 (52,000)
Ejire 24,000 38,000
Share of profit:
Taiyelolu (#38,000/2) 19,000 (38,000)
Ejire (#38,000/2) 19,000
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