Use the information below to answer this question

The partnership agreement between Abba, Baba and Kaka contains the following provision:

(i) 5% interest to be paid on capital and no interest to be charged on drawings

(ii) Profits and losses to be shared in the ratio 3:2:1 respectively

(iii) net profit as at 31/12/95 N 2,250.

.................Abba......Baba.......Kake

Capital..........5000......4000......3000

Current account...250......100.......175

Salary............300......300.......---

Drawings..........600......500........250

Abba's capital balance at the end of the year will be

  • A N5475
  • B N5725
  • C N4400
  • D N5000

The correct answer is D. N5000

No explanation given
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