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

question 79

Multiple Choice

Roberto and Reagan are both 25 percent owner/managers for Bright Light Enterprises. 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 decides that 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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Definitions:

Drugstores

Retail establishments that sell medications and other health-related products.

Service Retailer

is a type of retailer that primarily sells services rather than tangible products, such as salons, repair shops, and fitness centers.

Oil Change

A routine maintenance service for vehicles involving the replacement of the engine's oil and oil filter to ensure proper engine function.

Off-price Retailers

Stores that sell brand name and designer merchandise at lower prices than traditional retail outlets by taking advantage of overstock, last season's products, or bulk buying.