Use the following information to answer the given question, \(\begin{array}{c|c} & Baba & Tude\\ & N & N \\ \hline \text{Capital Accounts 1 January, 2000} &...

Answer Details

To find Baba's Current Account balance on 31st December, 2000, we need to calculate his share of the net profit for the year, which is calculated as follows: Baba's share of capital = N40,000 Baba's interest on capital (10% of N40,000) = N4,000 Baba's share of net profit (after deducting salaries) = N31,000 (i.e. N40,000 - N5,000) Baba's total credit balance in his Current Account during the year = N20,000 Baba's drawings during the year = N4,000 Therefore, Baba's Current Account balance on 31st December, 2000 is: N20,000 - N4,000 + N31,000 + N4,000 = N51,000 Therefore, the answer is option A, N35,500.