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Dan and Baker are in partnership with capitals of ₦50,000 and ₦30,000 each. ...


Question

Dan and Baker are in partnership with capitals of ₦50,000 and ₦30,000 each. The partnership agreement provides that: (i) profits be shared in the ratio of capital (ii) both partners earn interest on capital at 6% p.a (iv) both parents pay interest on drawings at 6% p.a. At the end of the year, Dan drew ₦15,000 while baker drew ₦14,000 in four installments on 31/3, 30\6, 30\9 and 30\12. The net profit for the year was ₦48,000. ₦5000 is to be written off the goodwill account.
Determine the total interest on capital due to the partners?

Options

A)
₦1200
B)
₦1800
C)
₦3000
D)
₦4800

The correct answer is D.


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