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

question 53

Multiple Choice

Roberto and Reagan are both 25-percent owner/managers for Bright Light Incorporated. Roberto runs the retail store in Sacramento, California, and Reagan runs the retail store in San Francisco, California. Bright Light generated a $126,050 profit companywide made up of a $75,300 profit from the Sacramento store, a ($25,750) loss from the San Francisco store, and a combined $76,500 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 in total?

• A)($25,052.50).
• B)($18,025.00).
• C)$4,816.25.
• D)$20,236.25.

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Definitions:

Enron

Enron was a U.S.-based energy company that collapsed after an accounting fraud scandal, becoming a symbol of corporate fraud and corruption.

Financial Statement

Summaries that offer a comprehensive view of a firm's financial status, featuring the balance sheet, income statement, and statement of cash flows.

Balance Sheet

An outline of a company’s financial status, detailing assets, liabilities, and the equity of its shareholders, at a precise time.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity.