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 $129,900 profit companywide made up of a $76,400 profit from the Sacramento store, a ($28,500) loss from the San Francisco store, and a combined $82,000 profit from the remaining stores. If Bright Light Incorporated is an S corporation, how much income will be allocated to Roberto?
A) $32,475.00.
B) $64,950.00.
C) $76,400.00.
D) $129,900.00.

Question

Quizplus · Accepted Answer

Roberto's income allocation from Bright Light Incorporated, an S corporation, is based on his ownership percentage, not the performance of the specific store he manages. The company's total profit is $129,900. As a 25-percent owner, Roberto's share is 25% of $129,900, which equals $32,475.00.

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