Question 17
Partnership AccountsUse the following information to answer questions 15 to 17.
Okoro and Osula are in partnership sharing profits and losses in the ratio 3:2 respectively. Their respective capital were ₦40,000 and ₦15,000 and their drawings were ₦7,000 and ₦5,000. Interest on capital was 5% and interest on drawings was 10%. The net profit was ₦30,000.
The total interest on capital is
- A.₦4,000
- B.₦2,750
- C.₦2,000
- D.₦750
Show the answer and explanation
Answer: B (₦2,750)
Explanation
5% × 40,000 = 2,000 plus 5% × 15,000 = 750, total ₦2,750.