tatement of LLC Liquidation Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows: Lester $28,100 Torres 65,000 Hearst 40,400 Total $133,500 In winding up operations during the month of August, noncash assets with a book value of $175,800 are sold for $218,000, and liabilities of $56,500 are satisfied. Prior to realization, Arcadia Sales has a cash balance of $14,200. a. Prepare a statement of LLC liquidation. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If an amount is zero, enter "0".
Statement of LLC Liquidation
Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows:
| Lester | $28,100 |
| Torres | 65,000 |
| Hearst | 40,400 |
| Total | $133,500 |
In winding up operations during the month of August, noncash assets with a book value of $175,800 are sold for $218,000, and liabilities of $56,500 are satisfied. Prior to realization, Arcadia Sales has a cash balance of $14,200.
a. Prepare a statement of LLC liquidation. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If an amount is zero, enter "0".
| Arcadia Sales, LLC | ||||||
| Statement of LLC Liquidation | ||||||
| For the Period August 1-31 | ||||||
Cash + |
Noncash Assets = |
Liabilities + |
Member Equity Lester (2/5) + |
Member Equity Torres (2/5) + |
Member Equity Hearst (1/5) |
|
| Balances before realization | $ | $ | $ | $ | $ | $ |
| Sale of assets and division of gain | ||||||
| Balances after realization | $ | $ | $ | $ | $ | $ |
| Payment of liabilities | ||||||
| Balances after payment of liabilities | $ | $ | $ | $ | $ | $ |
| Distribution of cash to members | ||||||
| Final balances | $ | $ | $ | $ | $ | $ |
b. Provide the
| Lester, Member Equity | |||
| Torres, Member Equity | |||
| Hearst, Member Equity | |||
| Cash |
c. What is the role of the income- and loss-sharing ratio in liquidating an LLC?
The income- and loss-sharing ratio is only used to distribute the gain or loss on the realization of asset sales. It is not used for the final distribution.
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