Question 33
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%.
Kukuma's current account balance is
- A.₦90,000
- B.₦70,000
- C.₦60,000
- D.₦50,000
Show the answer and explanation
Answer: C (₦60,000)
Explanation
Interest 10,000 + profit share (2/5 × 125,000) 50,000 = ₦60,000.