Final Accounts Prep - question one from AAT quiz

JC101
JC101 Registered Posts: 22 New contributor 🐸
in AAT Level 3 (Level 6 in Scotland)
Hi,
AAT has a quiz for FAPR -> http://woobox.com/f4rczs
I was just wondering what answer people had for the first question, which is...
"Erin and Ellie are in partnership with profits to be shared equally. Erin also has a salary of £10,000 and both partners have capital in the business of £30,000 and £25,000 respectively on which they take interest at 5%. The profit for the year is £56,750. What is Ellie's share of the profit?"
Options are £28,375, £28,250, £23,250 or £22,000
Cheers.

Comments

  • JC101
    JC101 Registered Posts: 22 New contributor 🐸
    Hi,
    My answer was £22,000. My workings were:
    56,750 - 10,000 - ((30,000+25,000)*5%) = 44,000
    44,000 / 2 = £22,000
  • JC101
    JC101 Registered Posts: 22 New contributor 🐸
    I'm a bit confused as £22,000 isn't the answer.
    The correct answer is £23,500.
    It seems I should have added together Ellie's share of the profit and her interest on capital.
    But I would have thought the question would have said something like "What is Ellie's total share of the profit?"
    What do other people think?

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