v2.cengagenow.com Cengage CengageNOWv2 | Online teaching and learning resource from Cengage Learning Ch 12-3 Exercises and 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 $62,000 and $50,000 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 62,000,000 112,000 Remaining income 21,600 Net income8,6006400 148,000 14,400 36,000 64,400 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. Revenues Martin Farley, Member Equity Ashley Clark, Member Equity Salary Expense Martin Farley, Drawing Ashley Clark, Drawing (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 the LLC were less than the sum of the salary allowances, both members would still be credited with their salary allowances. The difference between the net income and total salary allowances Check My Work 2 more Check My Work uses remaining Previous Next Assignment Score: 33.33% All work saved Email Instructor Save and Exit Submit Assignment for Grading

Question
v2.cengagenow.com
Cengage
CengageNOWv2 | Online teaching and learning resource from Cengage Learning
Ch 12-3 Exercises and 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 $62,000 and $50,000 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 62,000,000 112,000
Remaining income 21,600
Net income8,6006400 148,000
14,400
36,000
64,400
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.
Revenues
Martin Farley, Member Equity
Ashley Clark, Member Equity
Salary Expense
Martin Farley, Drawing
Ashley Clark, Drawing
(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 the LLC were less than the sum of the salary allowances, both
members would still be credited with their salary allowances. The difference between the net income and total salary allowances
Check My Work
2 more Check My Work uses remaining
Previous
Next
Assignment Score: 33.33%
All work saved
Email Instructor
Save and Exit
Submit Assignment for Grading
Expand
Transcribed Image Text

v2.cengagenow.com Cengage CengageNOWv2 | Online teaching and learning resource from Cengage Learning Ch 12-3 Exercises and 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 $62,000 and $50,000 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 62,000,000 112,000 Remaining income 21,600 Net income8,6006400 148,000 14,400 36,000 64,400 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. Revenues Martin Farley, Member Equity Ashley Clark, Member Equity Salary Expense Martin Farley, Drawing Ashley Clark, Drawing (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 the LLC were less than the sum of the salary allowances, both members would still be credited with their salary allowances. The difference between the net income and total salary allowances Check My Work 2 more Check My Work uses remaining Previous Next Assignment Score: 33.33% All work saved Email Instructor Save and Exit Submit Assignment for Grading

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Affordable Lawn Care, Inc., provides lawn mowing services to both commercial and residential custome...

A: Prepare an income statement, statement of retained earnings and balance sheet of Incorporation A for...

Q: XS Supply Company is developing its annual financial statements at December 31. The statements are c...

A: Statement of cash flows: Statement of cash flow is a financial statement that shows the cash and cas...

Q: Gelb Company currently manufactures 40,000 units per year of a key component for its manufacturing p...

A: The decision to manufacture or buy needs to be taken on the basis of impact of cost changes arising ...

Q: Shamrock, Inc.’s income statement contained the condensed information below. Shamrock, Inc.Incom...

A: Statement of cash flows: This statement reports all the cash transactions which are responsible for ...

Q: How is the earned income credit determined?

A: Earned income credit: Earned income credit is a refundable tax credit system designed by the federal...

Q: Walt Bach Company has accumulated the following budget data for the year 2019. Sales: 40000 units, ...

A: Cost of goods sold alludes to the immediate costs inferable from the generation of the goods sold in...

Q: On January 1, 2019, Lin plc issued a convertible bond with a par value of £50,000 inthe market for £...

A: Given :Par value of the Bond - € 50,000Interest rate                 - 10%Issued price              ...

Q: Pearson Architectural Design uses a job-order costing system and applies studio overhead to jobs on ...

A: 1. Compute the predetermined overhead rate.

Q: I am resubmitting this question as it was not fully answered and it did not have the correct answers...

A: 1. As per general accepted accounting principles, the absorption method is followed in the preparati...

Q: The following information is available for Sandhill Co. for three recent fiscal years.     2017 ...

A: Inventory turnover: This is the ratio which analyzes the number of times inventory is sold during th...

Q: Swifty’s Accounting Museum is exploring the purchase of a new building with a useful life of 20 year...

A: Calculate the total savings per year:Given:Cost of the building is $1,369,200Savings from the termin...

Q: Prepare a contribution margin format income statement China Imports, Inc., sold 18,000 units in May....

A: Contribution margin format income statement of China Imports, Inc. is prepared using MS Excel:

Q: I am lost on this problem, I tried using the 'Show me how' video but I don't understand it at all. H...

A: Since we only answer upto 3 sub-parts, we'll answer the first 3. Please resubmit the question and sp...

Q: On January 1, 2019, Shenzhen ltd. Issued a 10% convertible bond at par, with a face value $100,000 m...

A: A convertible bond represents a bond that can be converted into certain number of shares by its hold...

Q: Referring to the question E2-26A in the textbook named Managerial Accounting by Pearson- 5th edition...

A: Expenses: Expenses are costs incurred for the operations of a business. The costs incurred for gener...

Q: The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thi...

A: Click to see the answer

Q: Problem 14-1The following amortization and interest schedule reflects the issuance of 10-year bonds ...

A: c) Determine the stated interest rate and the effective-interest rate:

Q: Noah Yobs, who has $75,400 of AGI (solely from wages) before considering rental activities, has $67,...

A: We have solved part (a) as part (b) where it is asked to complete Form 1040 (page1) all the personal...

Q: Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall ...

A: “Hey, since there are multiple sub parts posted, we will answer first three sub parts. If you want a...

Q: I'm in the annuity section of accounting.  With the 6 tables the Spiceland book provides (listed bel...

A: FV of $1: This table is used to calculate the future value of a current investment that will grow ov...

Q: At the beginning of 2018, Thompson Service, Inc., showed the following amounts in the stock-holders'...

A: Prepare journal entry for the given transactions (from January 3 to May 9).

Q: Work-in-Process Inventory, June 1 ? Work-in-Process Inventory, June 30 55,000 gallons Un...

A: Beginning Work-in-process inventory: Beginning Work-in-process inventory represents partially finish...

Q: Who are covered by the anti-bribery provisions?  Who are covered by the accounting provisions?

A: The Foreign Corrupt Practices Act of 1977 (FCPA) is a United States federal law  known primarily for...

Q: Andretti Company has a single product called a Dak. The company normally produces and sells 85,000 D...

A: Incremental cost: Incremental cost refers to the cost incurred in producing an additional unit, in o...

Q: Once § 1231 gains are netted against § 1231 losses, if the gains exceed the losses, the net gain is ...

A: Internal Revenue Code (IRC):  Internal Revenue Code is generally referred to as “The CODE” outlines ...

Q: On January 1, 2019, Roosevelt Company purchased 12% bonds having a maturityvalue of $500,000 for $53...

A: Prepare amortization schedule.

Q: I'm having trouble solving this problem. Thanks!

A: (a) Determine the times interest earned ratio:

Q: Hi, I attempted this problem but did not get the correct values for part 2 (balances of the inventor...

A: 2.Calculate raw material ending balance: 

Q: Why are cash equivalents included with cash in a statement of cash flows?

A: Cash equivalents: Instead of keeping idle cash during high interest rates, the companies invest cash...

Q: I attempted this problem and tried to do the company's income statement for on company for december ...

A: Calculate the missing amounts:

Q: what are the differences between the following components of taxable income                   o   De...

A: Difference between the Deductions for AGI and Deductions from AGI: Deductions for AGI are also refer...

Q: 2. To prepare for the construction of its new headquarters, ABC company purchased a 500-acre plot of...

A: Section 835 of FASB Accounting standards codification relates to Interest. Section 835-20 relates to...

Q: Guenter and Firmin both of whom are CPAs, form a partnership with Guenter investing $100,00 and firm...

A: A general partnership is an agreement in which two or more partners agree to share the profits and l...

Q: MARKETING QUESTION: Video streaming service Netflix is expanding rapidly around the globe. It is cur...

A: Total number of television households= 18,822,90070% have access to high speed internet and 55 % of ...

Q: I need help solving this problem. The entire question did not fit in the screen grab I took so I cop...

A: a)  Prepare a cost of production report: 

Q: What is the relationship between the amount shown in the adjusted trial balance column for an accoun...

A: Adjusted trial balance:  Adjusted trial balance is that statement which contains complete list of ac...

Q: In October 2018, Ben and Jerry exchange investment realty in a § 1031 like-kind exchange. Ben bought...

A: The holding period for Ben's reality received from Jerry begin from 2007 because the holding period ...

Q: The following information is taken from the current year financial statement of EC (dollar figures a...

A: Loss from continuing operations: It refers to the loss incurred from ongoing business, it can be cal...

Q: Explain what is meant by the term management by exception. What is the relationship between the proc...

A: Management by exception: Under this style of management, employees are allowed to take decisions rel...

Q: Which of the following do not show up on a post-closing trial balance?   Assets and liabilities ...

A: Post closing trial balance: The post closing trial balance is a summary of all ledger accounts, and ...

Q: I am resubmitting this question as the answer to number two is incorrect from the guidance I was giv...

A: Calculate the sales value for each component.

Q: Bb Blackboard Learn mbe Course: ACCT 209: Survey of Acc X X New Tab ckboard.com/webapps/ubsh-Iti-int...

A: 1.Credit terms - 2/10 , n/30; Date June 8:Cash received = $30,000 (100% - 2%)Cash received = $29,400

Q: Problem 14-2Concord Co. is building a new hockey arena at a cost of $2,620,000. It received a downpa...

A: Calculate Issue price of the bonds. 

Q: I don't understand this question either.   Flowers Inc.  has both common and preferred stock.  There...

A: When a company has non-cumulative preferential stock, it means that whenever a company distributes d...

Q: At December 31, 2018, Burr AG owes €500,000 on a note payable due February 2019. (a) If Burr intends...

A: Current liability: Current liability is an obligation that the companies need to pay from the remain...

Q: is the answer correct?

A: Material spending variance is the total variance on the materials and includes both material purchas...

Q: Northwood Company manufactures basketballs. The company has a ball that sells for $35. At present, t...

A: Note: The answers provided by you for the first 3 requirements are correct. Hence, I am solving from...

Q: Easter Supply sells a variety of merchandise to retail stores on account, but it insists that any cu...

A: Click to see the answer

Q: The following items appeared on the January 31 bank reconciliations for Corbett Company: Outstanding...

A: Bank Reconciliation Statement:Bank statement is prepared by bank. The company maintains its own reco...

Q: Clem and Chloe, a married couple, sell their principal residence that they have owned and occupied f...

A: Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need...