Roberto and Reagan are both 25 percent owner/managers for Bright Light Inc. Roberto runs the retail store in Sacramento, CA, and Reagan runs the retail store in SanFrancisco, CA. Bright Light Inc. 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 Inc. is an Scorporation, how much income will be allocated to Roberto?
A) $125,000.
B) $31,250.
C) $75,000.
D) $62,500.

Question

Quizplus · Accepted Answer

As a 25% owner of an S corporation, Roberto will be allocated 25% of the total companywide profit, which is $125,000. Therefore, his share is 25% of $125,000, which equals $31,250.

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