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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 3:2. 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. 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? If the net income of the LLC were less than the sum of the salary allowances, allowances. The difference between the net income and total salary allowances would be allocated to each partner as members would still be credited with their salary according to the ratio. The capital accounts of Trent Henry and Tim Chou have balances of $197,000 and $142,000, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry's interest for $45,300 and one-fourth of Chou's interest for $31,200. Clarke contributes $48,100 cash to the partnership, for which she is to receive an ownership equity of $48,100. a1. Journalize the entry to record the admission of Gilbert. For a compound transaction, if an amount box does not require an entry, leave it blank. a2. Journalize the entry to record the admission of Clarke b. What are the capital balances of each partner after the admission of the new partners? Partner Trent Henry Tim Chou LeAnne Gilbert Becky Clarke Capital Balance

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