Abba’s capital balance at the end of the year will be?

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

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

Correct Answer:

Option D – N5000