Halidu and Hamed are business partners with ₦30,000 and ₦20,000 capital respectively. At the end of the financial year, a profit of ₦12,000, which included ...

Answer Details

Halidu and Hamed are business partners and the total capital they invested is ₦30,000 + ₦20,000 = ₦50,000. Since no profit sharing ratio is given, we will assume that the profits will be shared in the ratio of their capital investment. Halidu invested ₦30,000 which is 3/5 (60%) of the total capital, while Hamed invested ₦20,000 which is 2/5 (40%) of the total capital. Halidu's salary of ₦3,000 is an expense to the partnership and it is first deducted from the profit before sharing. Therefore, Profit available for sharing = Total Profit - Halidu's salary = ₦12,000 - ₦3,000 = ₦9,000 Halidu's share of the profit = (60% of the total profit available) = (60/100) x ₦9,000 = ₦5,400 Therefore, the answer is option C: ₦5,400.