Waters Corporation Is an S Corporation with Two Equal Shareholders

Waters Corporation is an S corporation with two equal shareholders, Mia Jones and David Kerns. This year, Waters recorded the following items of income and expense: $$\begin{array} { l r } \text { Sales revenue } & \$ 500,000 \\\text { Interest income } & \mathbf { 6 , 0 0 0 } \\\text { Long-term capital gain } & \mathbf { 1 0 , 0 0 0 } \\\text { Cost of goods sold } & ( \mathbf { 2 5 0 , 0 0 0 } ) \\\text { Salary and wages } & \mathbf { ( 7 5 , 0 0 0 } ) \\\text { Other operating expenses } & \mathbf { ( 5 5 , 0 0 0 } ) \end{array}$$ Waters distributed $25,000 to each of its shareholders during the year. If Mia's adjusted tax basis in her partnership interest was $50,000 at the beginning of the year, compute her adjusted tax basis in her partnership interest at the end of the year.

A) $93,000
B) $118,000
C) $50,000
D) $85,000