Financial Accounting

15th Edition
Carl Warren + 2 others
ISBN: 9781337272124



Financial Accounting

15th Edition
Carl Warren + 2 others
ISBN: 9781337272124
Textbook Problem

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:


In winding up operations during the month of August, noncash assets with a book value of $146,000 are sold for $158,000, and liabilities of $35,000 are satisfied. Prior to realization, Arcadia Sales has a cash balance of $26,000.

  1. a. Prepare a statement of LLC liquidation.
  2. b. Provide the journal entry for the final cash distribution to members.
  3. c. What is the role of the income- and loss-sharing ratio in liquidating an LLC?


To determine

Prepare the statement of LLC liquidation


Working note 1

Calculation of division of realization Profit among partners:

The following table determines the realization profit.

 Sale price of Non cash asset (A) $  158,000
Book value of Non cash asset (B) $  146,000
Realization profit (A) – (B) $  12,000

Table (2)

The profit and loss sharing ratio among partner...


To determine

Record journal entry to distribute the cash among the partners.


To determine

Explain role of the income and loss sharing ratio in liquidating an LLC.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the underlying assumptions of Theory X and Theory Y?

Foundations of Business (MindTap Course List)

How do SSAE 16 Type 1 and Type 2 differ?

Accounting Information Systems

Explain how a trial balance and a balance sheet differ.

College Accounting (Book Only): A Career Approach

Classify consumer products


What is a loan amortization schedule, and what are some ways these schedules are used?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What is a compound entry?

College Accounting (Book Only): A Career Approach