Use the following information to answer questions below
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 interest on capital is
-
#15,000
- #25,000
- #10,000
- #75,000
The correct answer is: A
Explanation
Teteh's share of interest on capital = 5% x 300,000 = 15,000