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 Incorporated generated a $127,800 profit companywide made up of a $75,800 profit from the Sacramento store, a ($27,000)loss from the San Francisco store, and a combined $79,000 profit from the remaining stores. If Bright Light Incorporated is an S corporation, how much income will be allocated to Roberto?
A)$31,950.00.
B)$63,900.00.
C)$75,800.00.
D)$127,800.00.

Question

Quizplus · Accepted Answer

Roberto's income allocation is based on the companywide profit and his ownership percentage. The companywide profit is $127,800. As a 25-percent owner, Roberto's share is 25% of $127,800, which equals $31,950.

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