Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. dividing llc income martin farley and ashley clark

Dividing LLC Income Martin Farley and Ashley Clark formed a limited liability company with an...

50.1K

Verified Solution

Question

Accounting

image

Dividing LLC Income Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $69,000 and $55,000 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:5. The two members withdrew amounts equal to their salary allowances. Revenues were $668,000 and expenses were $520,000, for a net income of $148,000. a. Determine the division of $148,000 net income for the year. Schedule of Division of Net Income Farley Clark Total Salary allowance $ Remaining income Net income b. Provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members. For a compound transaction, if an amount box does not require an entry, leave it blank. (1) (2) - c. If the net income were less than the sum of the salary allowances, how would income be divided between the two members of the LLC? members would still be credited with their salary allowances. The difference between the net income and total salary allowances would be allocated to If the net income of the LLC were less than the sum of the salary allowances, each partner as , according to the ratio

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students