Net share of profit after interest on excess drawings

Steps:

• Profit sharing ratio L:M = 100,000:120,000 = 5:6 (total parts 11).
• L's gross share of profit = (5/11) × 28,000 = 12,500.
• L's excess drawings = 28,000 - 10,000 = 18,000.
• Interest on L's excess drawings = 18,000 × 5% = 900.
• L's share of residual profit = 12,500 - 900 = 11,600.

Why B is correct:

• B equals L's gross profit share minus interest on excess drawings, per partnership accounting rules for appropriation.

Why the others are wrong:

• A. Uses incorrect gross share of 12,420 (understates ratio application).
• C. Applies exact ratio without rounding, yielding 11,827 ≈ 11,800.
• D. Subtracts insufficient interest (only 767 instead of 900).

Final answer: B