Dividing LLC IncomeMartin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of$64,000 and $51,000 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:2. Thetwo members withdrew amounts equal to their salary allowances. Revenues were $668,000 and expenses were $520,000, for a netincome of $148,000.a. Determine the division of $148,000 net income for the year.Schedule of Division of Net IncomeLine Item Description Farley ClarkSalary allowance19,800 $ 13,200Remaining incomeNet incomeTotalb. Provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members. If an amount box doesnot require an entry, leave it blank.(1) Revenues

The general correctness of the partnership's financial statements depends on maintaining accurate…

Answered: Martin Farley and Ashley Clark formed a…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 14P

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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…
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 $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. Schedule of Division of Net Income Farley Clark Total Salary allowance $ 40,000 $ 30,000 $ 70,000 Remaining income 46,800 31,200 78,000 Net income 86,800 61,200 148,000 Feedback V 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. b. Provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members. If an amount box does not require an entry, leave it blank. (1)…
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 $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. For a compound transaction, if an amount box does not require an entry, leave it blank.
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.
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…
For each of the independent cases below, prepare a schedule of profit or loss distribution, and journal entry to record the distribution (explanation may be omitted). 5) The partnership agreement of Emily, Gregg and Samuel provided that profits are to be divided as follows: . Emily is to receive a salary allowance of P100,000 for managing the business. Partners are to receive 10% interest on average capital balances. Remaining profits are to be divided in the ratio of 30:30:40 to Emily, Gregg, and Samuel, respectively. Emily had a capital balance of P600,000 at Jan. 1, 2020 and had drawings of P80,000 on Aug. 1, 2020. Gregg's capital balance on Jan. 1, 2020 was P900,000 and invested an additional P300,000 on Sept. 1, 2020. Samuel's beginning capital balance was P1,100,000 and he withdrew P100,000 on July 1 but invested an additional P200,000 on Oct. 1, 2020. The partnership had incurred a net loss of P120,000 during the year.
Instructions Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $36,500 and $30,300 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. 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? First Question a. Determine the division of $148,000 net income for the year. Salary allowance $ Remaining income Net income $ Farley $ $ Clark…
Item No. 24 is based on the following information: A, B, C are partners. On December 31, 200C, their capital balances and profit sharing ratios are: A, P 75,000 (60%) , B, P 150,000 (25%), and C, P 180,000 (15%). C withdrew P 30,000 during the year 200D. Net loss for the year ended December 31, 200D was P 60,000. The partners decided to liquidate. There were unpaid liabilities of P 15,000 and cash on hand of P 2,100. 24. The amount to be realized by the partnership on the sale of its noncash assets so that A will receive a total of P 57,000 in the final settlement of his interest should be: a. P 357,900. C. P 27,900. b. P 309,900. d. P 18,000. Item No. 25 is based on the following information: Christian and Dior are partners, who share profits equally, were incapacitated due to a car accident. A liquidator was appointed to wind up their partnership. The balance sheet accounts are shown below: Cash P 35,000 Liabilities P 19,000 Other Assets 110,000 72,000 Christian Capital ---- Dior…
Part AEbanks, Brown, and Thomas are partners. They carry on a business jointly as EBT surveyors and shareprofits and losses in the ratio 25:45: 30.The trading account profit as at 31 December 2021 was $6,500,000 after charging a nominal tax of$750,000.Notes:1. The partners receive interest on their capital accounts at 9.5 % on the balance of their partnercapital at the end of the budget year. The interest on the capital account was not included in theincome statement.2. Include in the income statement is $80,000 salary per month for each partner.3. The partnership paid motor vehicle expenses for vehicles owned by the partners as follows:- Ebanks -$ 50,000- Brown - $80,000- Thomas - $130,000 The partners did not use the vehicles for the partnership business.4. Profit on disposal was $180,000.5. Depreciation on plant and machinery for the year was $900,000.6. In recognition of the new IFRS 9 standard, a provision for bad debt of $75,000 was made. Thisrepresents a % of the business year…
Bam and Daniel formed a joint venture. They agreed to share profit or loss on the ratio of 70% and 30%, respectively. The results pf operations for 2022 taxable year were provided below: Joint Venture Bam Daniel Gross Income 5,000,000.00 3,000,000.00 2,000,000.00 Business expenses 3,000,000.00 2,000,000.00 1,000,000.00 The income tax due of Bam is? a. 288,000 b. 0 c. 97,000 d. 600,000

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