Question 32
Partnership AccountsUse the following information to answer questions 32 to 34
Teteh and Kukuma are in partnership with capital balances of ₦300,000 and ₦200,000 respectively. They agreed to share profit on the basis of their capital. The profit for the year is ₦150,000 and the interest on capital is 5%.
Teteh's share of profit is
- A.₦90,000
- B.₦75,000
- C.₦60,000
- D.₦50,000
Show the answer and explanation
Answer: B (₦75,000)
Explanation
Interest on capital = 15,000 + 10,000; residual 125,000 shared 3:2 gives Teteh ₦75,000.