Martin Farley and Ashley Clark formed a limited liability company with an operat

Question

Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $36,400 and $28,100 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:1. The two members withdrew amounts equal to their salary allowances. Note: The reduction in members' equity from withdrawals would be disclosed on the statement of members' equity. Required: Determine the division of $149,400 net income for the year.

Explanation / Answer

Hi,

The correct answer is as follows:

Martin’s share: (3/4)*149400

= 112050

Ashley’s share = (1/4)*149400

= 37350

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.