Question
Hello. I'm having issues trying to solve the following problem. My answer key says that that answer is c. 5,000 but I'm not sure how
Hello. I'm having issues trying to solve the following problem. My answer key says that that answer is c. 5,000 but I'm not sure how to arrive at that answer. Can you please explain how to arrive at the correct answer? I would appreciate it. :-)
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 $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 in total?
A) ($25,000) B) ($17,500) C) $5,000 D) $20,000
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