I think you misread the question. Originally, before extraction, there was 0.500 g of organic compound in the water. However, you should still have gotten the right answer. Your biggest mistake was 0.85 + 0.5 = 0.90...
There are a couple ways of solving this. One is to treat it like any other equilibrium reaction.
The second way is to use an explicit formula for the mole fraction (or percentage) of the solute remaining in the aqueous phase. Turns out this value (the mole fraction, which we will call q) is independent of the original concentration (Note that this is why it would not have mattered how you comprehended the problem). You could solve the problem even if you didn't know that there was 0.500g to begin with.
First see if you can solve this problem like any equilibrium reaction. Then try to find the formula for q, where q = molaq / total mol.