Day: November 27, 2023

Alex and Lucy are partners in a business.

Alex receives an annual salary of £5,000 from the partnership and the balance of profits and losses is shared between Alex and Lucy in the ratio of 3 : 2 respectively.

In the last financial year, the net profit was £30,000.

How much was credited to each partner for the year?

Select ONE answer:

1. Alex £10,000 and Lucy £15,000
2. Alex £12,000 and Lucy £18,000
3. Alex £20,000 and Lucy £10,000
4. Alex £21,000 and Lucy £14,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct- £30k – £5k = £25k / 5 = £5K per share, therefore Alex receives £5k * 3 + £5k salary
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.