Statement of Members\' Equity, Admitting New Member The statement of members\' e
ID: 2478025 • Letter: S
Question
Statement of Members' Equity, Admitting New Member
The statement of members' equity for Bonanza, LLC, follows:
a. What was the income-sharing ratio in 2016? Enter the percentage per member and then select the ratio.
b. What was the income-sharing ratio in 2017? Enter the percentage per member and then select the ratio.
c. How much cash did Thomas Dunn contribute to Bonanza, LLC, for his interest?
$
d. Why do the member equity accounts of Idaho Properties, LLC, and Silver Streams, LLC, have positive entries for Thomas Dunn’s contribution?
The positive entries to Idaho Properties and Silver Streams are the result of Thomas Dunn.
e. What percentage interest of Bonanza did Thomas Dunn acquire?
%
f. Why are withdrawals less than net income?
Withdrawals will be less when the members wish to capital in the business to business growth.
Properties,
LLC,
Member
Equity Silver
Streams,
LLC,
Member
Equity
Thomas
Dunn,
Member
Equity Total
Members'
Equity Members' equity, January 1, 2016 $273,000 $307,000 $580,000 Net income 57,000 133,000 190,000 Members' equity, December 31, 2016 $330,000 $440,000 $770,000 Dunn contribution, January 1, 2017 3,000 7,000 $220,000 230,000 Net income 62,500 137,500 50,000 250,000 Less member withdrawals (32,000) (48,000) (40,000) (120,000) Members' equity, December 31, 2017 $363,500 $536,500 $230,000 $1,130,000
Explanation / Answer
a net income for each member by the total net income.The income-sharing ratio is determined by dividing the net income for each member by the total net income. Thus, in 2010, the income-sharing ratio is as follows percentage per member Idaho Properties, LLC 57000/190000 30% Silver Streams, LLC =133000/190000 70% Ratio 3: 7 b What was the income-sharing ratio in 2017? Net Income percentage per member Idaho Properties, LLC 62500 25.0% Silver Streams, LLC 137500 55.0% Thomas Dunn 50000 20.0% 250000 Ratio 25:55:20 C Thomas Dunn’s provided a $230,000 cash contribution to the business. The amount credited to his member equity account is this amount less a $10000 bonus paid to the other two members D Why do the member equity accounts of Idaho Properties, LLC, and Silver Streams, LLC, have positive entries for Thomas Dunn’s contribution? The positive entries is due to bonus paid by Thomas Dunn E Thomas Dunncontribution 230000 Idaho Properties, LLC, member equity 330000 SilverStreams, LLC, member equity 440000 Total 1000000 Reed’s ownership interest after admission ($220,000 ÷ $1000000) 22.00%
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