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enytakeAs ssignmentMain.do?invoker assignments&takeAssignmentSessionLocator-assignment-take;&inprogress-false; Problems eBook Calculator Print item Dividing LLC Income Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $68,000 and $54,000 t salary allowances. Revenues were $668,000 and expenses were $520,000, for a net income of $148,000. a. Determine the division of $148,000 net income for the year. T.AL. ctively. In addition, the operating agreement specifed an income-sharing ratio of 3:2. The two members withdrew amounts equal to their Schedule of Division of Net Income Farley Clark Total Salary allowance$ 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. Chnck My Work 2 more ue1 femaing 45 AM e to search 0420

Explanation / Answer

c. If the net income of the LLC were less than the sum of the salary allowances, all members would still be credited with their salary allowances. The difference between the net income and total salary allowances would be allocated to each partner as deduction according to the income-sharing ratio.

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a. Schedule of Division of Net Income Farley Clark Total Salary allowance 68000 54000 122000 Remaining income (3:2) 15600 10400 26000 Net income $ 83600 64400 148000

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