**Answer:**

**net income of Reagan = $5000**

**Explanation:**

**given data **

profit companywide = $125,000

profit from the Sacramento = $75,000

loss from the San Francisco = $25,000

profit from the remaining stores = $75,000

**to find out **

how much income will be allocated to Reagan

**solution**

we know that Reagan's Profit From own store is 25,000 and 70% belongs to them only

so here profit to be distributed on pro rata basis will be as

profit to be distributed = $75000 + 30% of Roberto profit - 30% of Reagan profit ..................1

profit to be distributed = $75000 + 30% × $75,000 - 30% × $25,000

**
profit to be distributed = $90000**

and here share of Reagan is = 25% of $90000

**share of Reagan = $22500**

so net income of Reagan will be here as

net income of Reagan = $22500 - 70% of 25000

**net income of Reagan = $5000**