LLC Net Income and Statement of Members\' Equity Marvel Media, LLC, has three me
ID: 2509366 • Letter: L
Question
LLC Net Income and Statement of Members' Equity
Marvel Media, LLC, has three members: WLKT Partners, Madison Sanders, and Observer Newspaper, LLC. On January 1, 20Y2, the three members had equity of $210,000, $55,000, and $125,000, respectively. WLKT Partners contributed an additional $50,000 to Marvel, Media, LLC, on June 1, 20Y2. Madison Sanders received an annual salary allowance of $121,800 during 20Y2. The members’ equity accounts are also credited with 18% interest on each member's January 1 capital balance. Any remaining income is to be shared in the ratio of 4:3:3 among the three members. The revenues, expenses, and net income for Marvel Media, LLC, for 20Y2 were $1,039,152, $629,152 and $410,000 respectively. Amounts equal to the salary and interest allowances were withdrawn by the members.
a. Determine the division of income among the three members. If an amount box does not require an entry, leave it blank.
b. Prepare the journal entries to close the (1) net income and (2) withdrawals to the individual member equity accounts. For a compound entry, if an amount box does not require an entry, leave it blank.
c. Prepare a statement of members' equity for 20Y2. If an amount box does not require an entry, leave it blank.
d What are the advantages of an income-sharing agreement for the members of this LLC?
Without an income-sharing agreement, each member be credited with an equal proportion of the total earnings, or one-third each. Separate contributions be acknowledged in the income-sharing formula.
Schedule of Division of Income WLKT Partners Madison Sanders Observer Newspaper, LLC Total Salary allowance $ $ Interest allowance $ $ Remaining income (4:3:3) Net income $ $ $ $ of and to Marvel, Media, LIC, on June 1, 20Y2. Madison Sanders received an annual salary alowance of $121,800 during 20Y2. The members Any remaining income is to be shared in the ratio of 4:3 629,152 and $410,000 respectively. Amounts equal to the salary and interest allowances were withdrawn by the members. O Type here to search uDExplanation / Answer
Schedule of Division of Income WLKT Partners Madison Sanders Observer Newspaper, LLC Total Salary allowance 0 120000 0 120000 Interest allowance 37800 9900 22500 70200 (210000*18%) (55000*18%) (125000*18%) Remaining income (4:3:3) 87920 65940 65940 219800 (410000-120000-70200)=219800 219800/10*4 219800/10*3 219800/10*3 Net income 125720 195840 88440 410000 Dr Cr 1 Income Summary 410000 WLKT Partners capital 125720 Madison Sanders capital 195840 Observer Newspaper, LLCcapital 88440 2 WLKT Partners capital 37800 Madison Sanders capital( 120000+9900) 129900 Observer Newspaper, LLCcapital 22500 WLKT Partners Withdrawal 37800 Madison Sanders Withdrawal 129900 Observer Newspaper, LLC withdrawal 22500 Marvel Media, LLC Statement of Members' Equity For the Year Ended December 31, 20Y2 WLKT Partners Madison Sanders Observer Newspaper, LLC Total Balances, January 1, 20Y2 210000 55000 125000 390000 Capital additions 50000 0 0 50000 260000 55000 125000 440000 Net income for the year 125720 195840 88440 410000 385720 250840 213440 850000 Member withdrawals 37800 129900 22500 190200 Balances, December 31, 20Y2 347920 120940 190940 659800 ans d the fill in blanks options not provided
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.