Use the following information to answer the question below

Ata. Bubu and Chikum were in partnership sharing profits and losses in proportion to their capital contributions:

Capital  Drawings
Ata  40,000  8,000
Bubu  30,000 5000
Chikum  20,000 

Net profit for the year was 40,500 and the interest on capital was 5% per annum.

 

A. N16,000
B. N12,000
C. N8,000
D. N4,000

Correct Answer:

Option B – N12,000

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