Kukuma’s current account balance is?

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%.

A. #50,000
B. #70,000
C. #90,000
D. #60,000

Correct Answer:

Option B = #70,000

Explanation

Kukuma’s current capital = 10,000 ( interest on capital) + 60,000( share of of profit i.e 2/5 x 125,000)

= 70,000