Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 12, Problem 7E
a.
To determine
Determine the division of $148,000 net income between the partners.
b. 1
To determine
Provide the
c.
To determine
Explain if the net income was less than the sum of salary allowance, how would income is divided between two members?
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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
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Clark
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Remaining income
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Net income
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Question Content Area
b. Provide journal…
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…
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.
Chapter 12 Solutions
Financial Accounting
Ch. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 1PEACh. 12 - Prob. 1PEBCh. 12 - Prob. 2PEACh. 12 - Prob. 2PEBCh. 12 - Prob. 3PEACh. 12 - Prob. 3PEBCh. 12 - Prob. 4PEACh. 12 - Prob. 4PEBCh. 12 - Prior to liquidating their partnership, Parker and...Ch. 12 - Liquidating partnerships Prior to liquidating...Ch. 12 - Prob. 6PEACh. 12 - Prob. 6PEBCh. 12 - Prob. 7PEACh. 12 - Eclipse Architects earned 1,800,000 during 2016...Ch. 12 - Prob. 1ECh. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Marvel Media, LLC, has three members: WLKT...Ch. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 16ECh. 12 - Prob. 17ECh. 12 - The statement of members equity for Bonanza, LLC,...Ch. 12 - Distribution of cash upon liquidation Hewitt and...Ch. 12 - Distribution of cash upon liquidation David Oliver...Ch. 12 - Liquidating partnershipscapital deficiency Lewis,...Ch. 12 - Prob. 22ECh. 12 - Prob. 23ECh. 12 - Statement of partnership liquidation After closing...Ch. 12 - Prob. 25ECh. 12 - Prob. 26ECh. 12 - The accounting firm of Deloitte Touche is the...Ch. 12 - Prob. 28ECh. 12 - Prob. 1PACh. 12 - Prob. 2PACh. 12 - Prob. 3PACh. 12 - Prob. 4PACh. 12 - Statement of partnership liquidation After the...Ch. 12 - Prob. 6PACh. 12 - Prob. 1PBCh. 12 - Prob. 2PBCh. 12 - Prob. 3PBCh. 12 - Prob. 4PBCh. 12 - Statement of partnership liquidation After the...Ch. 12 - On August 3, the firm of Chapelle, Rock, and Pryor...Ch. 12 - Prob. 1CPCh. 12 - Prob. 2CPCh. 12 - Prob. 3CPCh. 12 - Prob. 4CP
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