Louise and Thelma Are in Partnership Sharing Residual Profits and Losses

Multiple Choice

Louise and Thelma are in partnership sharing residual profits and losses 50:50. The profit for the year is $96 000. Thelma is entitled to a salary of $40 000 per annum (to be paid by means of a book entry) . The amount credited to Thelma's retained earnings account after the final distribution of profits is:

A) $88 000
B) $48 000
C) $28 000
D) $68 000