Roberto and Reagan Are Both 25-Percent Owner/managers for Bright Light

question 80

Multiple Choice

Roberto and Reagan are both 25-percent owner/managers for Bright Light Inc.Roberto runs the retail store in Sacramento, CA, and Reagan runs the retail store in San Francisco, CA.Bright Light generated a $125,000 profit companywide made up of a $75,000 profit from the Sacramento store, a ($25,000) loss from the San Francisco store, and a combined $75,000 profit from the remaining stores.If Bright Light is taxed as a partnership and it is decided that both Roberto and Reagan will be allocated 70 percent of his own store's profit, with the remaining profits allocated pro rata among all the owners, how much income will be allocated to Reagan?

• A)($25,000)
• B)($17,500)
• C)$5,000
• D)$20,000

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