What's the best way to repair leak from shower walls?

Question:In the gap where the top shower walls meet the bottom wall water collects in some of the gap and trickles into the joint made between the shower and drywall. I see caulk spaced between the gaps. I'm thinking of using 100% silicone caulk and completely filling the gap or should there be some spaces left as long as it doesn't leak? Also how can I make sure greenboard drywall was used? This is a remodeled bathroom and I'm the 1st to use it.

Answers:
Want a cheap answer?? Go to any home improvement store and check prices for an inexpensive ( or not ) surround. You don't have to worry about green board, as the surround will enclose the entire tub wall. Has been a cheap fix for years.