Use the information below to answer this question.Timo and Chris are computer engineers who went into partnership as Teachi and Co. Timo brought cash of₦12,...

Answer Details

To determine the profit sharing ratio based on capital contribution, we need to calculate the total capital contributed by each partner. Timo's total capital = ₦12,000 (cash) + ₦18,000 (furniture) + ₦70,000 (vehicle) = ₦100,000 Chris's total capital = ₦10,000 (cash) + ₦105,000 (building) + ₦35,000 (personal computers) = ₦150,000 The total capital contributed by Teechi and Co. is the sum of Timo's and Chris's capital: Total capital = ₦100,000 + ₦150,000 = ₦250,000 The profit sharing ratio based on capital contribution is the proportion of the total capital contributed by each partner. Timo's proportion = ₦100,000 / ₦250,000 = 2/5 Chris's proportion = ₦150,000 / ₦250,000 = 3/5 Therefore, the profit sharing ratio based on capital contribution by Teechi and Co. is 2:3, which means that Timo will receive 2 parts of the profit for every 5 parts received by Chris.