Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $40,000 and $30,000 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 net income of $148,000. a. Determine the division of $148,000 net income for the year. Schedule of Division of Net Income Farley Clark Total Salary allowance 40,000 30,000 2$ 70,000 Remaining income 46,800 V 31,200 V 78,000 Net income 86,800 V $ 61,200 148,000 Feedback Check My Work a. Set up a column for each partner and a total column. Allocate salary allowances, then distribute the remaining income based on the income sharing agreement.
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- Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $40,000 and $30,000 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.b. Provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members.c. If the net income was less than the sum of the salary allowances, how would income be divided between the two members of the LLC?Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $56,000 and $45,000 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. Question Content Area a. Determine the division of $148,000 net income for the year. Schedule of Division of Net Income Farley Clark Total Salary allowance $fill in the blank 996889042f95077_1 $fill in the blank 996889042f95077_2 $fill in the blank 996889042f95077_3 Remaining income fill in the blank 996889042f95077_4 fill in the blank 996889042f95077_5 fill in the blank 996889042f95077_6 Net income $fill in the blank 996889042f95077_7 $fill in the blank 996889042f95077_8 $fill in the blank 996889042f95077_9 Question Content Area b. Provide journal…Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $41,400 and $32,100 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. Revenues were $668,000 and expenses were $520,000, for a net income of $148,000. Note: The reduction in members’ equity from withdrawals would be disclosed on the statement of members’ equity. Required: a. Determine the division of $148,000 net income for the year. b. On December 31, provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members. c. If the net income was less than the sum of the salary allowances, how would income be divided between the two members of the LLC? Part a - attached Part b - attached Part c - c. If the net income was less than the sum of the salary allowances, how would income…
- Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $40,000 and $30,000 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. Note: The reduction in members’ equity from withdrawals would be disclosed on the statement of members’ equity. Required: a. Determine the division of $148,000 net income for the year. b. On December 31, provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount…Reardon and Reese had capital balances of $140,000 and $160,000, respectively, at the beginning of the current fiscal year. The partnership agreement provides for salary allowances of $25,000 and $35,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $120,000. a. Present the Division of net income statement for the current year. Net income $120,000 Reardon Reese Total Division of net income: Salary allowance $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Interest allowance fill in the blank 4 fill in the blank 5 fill in the blank 6 fill in the blank 8 fill in the blank 9 fill in the blank 10 Net income $fill in the blank 11 $fill in the blank 12 $fill in the blank 13 b. Assuming that the net income had been $76,000 instead of $120,000, present the Division of…D, E and F formed a joint operation. They agreed on the following: F is the appointed as the manager. As compensation, F is entitled to a ₱120 salary plus bonus of 25% of profit after deducting the salary and the bonus. However, F will be charged for the cost of any unsold inventory. Interest of 10% per annum is allowed to D’s and E’s capital contributions. Any remaining profit or loss is divided equally. The joint operation was complete after a year. The following were the transactions: D contributed cash of ₱400 and merchandise costing ₱ 800. E contributed merchandise costing ₱1,600. E paid freight of ₱80 in the transfer. F purchased merchandise worth ₱400 using D’s cash contribution. F paid expenses of ₱800 using his own cash. F made total sales of ₱3,200. All inventories were sold except one-half of those contributed by E. How much is the joint operation’s profit after deduction for salary but before deduction for bonus? ______________________ 2. On the cash…
- Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $30,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $110,000. a. Present the Division of net income section of the income statement for the current year. excess allowance over net inome/remaining income Net income $110,000 Rodgers Winter Total Division of net income: Salary allowance $ $ $ Interest allowance Total Net income $ $ $ b. Assuming that the net income had been $65,000 instead of $110,000, present the Division of net income section of the income statement for the current year. excess allowance over net…Dividing LLC IncomeMartin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $63,000 and $50,000 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. 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 FarleyClarkTotalSalary 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.(1) (2) 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…Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $30,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $110,000. a. Present the Division of net income section of the income statement for the current year. Net income $110,000 Rodgers Winter Total Division of net income: Salary allowance $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Interest allowance fill in the blank 4 fill in the blank 5 fill in the blank 6 Total fill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 fill in the blank 13 Net income $fill in the blank 14 $fill in the…
- Dividing LLC Income Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $59,000 and $47,000 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:5. 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. (1) (2) c. If the net income were less than the sum of the…Dividing LLC Income Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $59,000 and $47,000 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:2. The two members withdraw amount equals to their salary allowances. Revenues were $668,000 and expenses where $520,000, for 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 the journal entries to close the revenues and expenses account for both members.In the first year of operations, the partnership of Sun, Nyu, and Beom made a profit of 20,000, before providing for salaries of 5,000 and 3,000 per annum for Sun and Nyu, respectively. The capital contributions of the partners are as follows: Sun, 30,000; Nyu, 20,000; and Beom, 10,000. Assuming that no profit and loss ratio is provided in the partnership agreement and that there has been no change in the capital contributions during the year, how much profit share would Sun receive?