The following information pertains to a newly formed partnership during the first year of operations:

• John Witt and Ed Smith decided to form a partnership on January 1. Witt invested $60,000 and Smith invested $40,000. On December 31, the end of the fiscal year, a net income of $200,000 was earned.

The statement of partners' equity for a partnership will disclose additional investments andCalculate each partner's share of the earnings if each partner is to receive 10% on their original investment, Witt and Smith are to receive a salary allowance of $40,000 and $30,000 respectively, and the remainder divided as follows: 70% to Witt and 30% to Smith

a. Witt, $140,000; Smith, $60,000

b. Witt, $130,000; Smith, $70,000

c. $100,000 each

d. None of these choices are correct.