Louise and Billy Are in Partnership Sharing Residual Profits and Losses

Multiple Choice

Louise and Billy are in partnership sharing residual profits and losses 50:50. The profit for the year is $120 000. Louise is entitled to a salary of $50 000 per annum (to be paid by means of a book entry) . Calculate the amount credited to Louise's retained earnings account after the final distribution of profits.

A) $170 000
B) $50 000
C) $85 000
D) $60 000