Dividing LLC IncomeInstructionsChan of AccountseuinalFr QestionStarting QuesienInstructionsMartin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $36,400 and $28,100 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, Revenueswere $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 wo members. Refer tothe Chart of Accounts for exact wording of account titdes.C. If the net income was less than the sum of the salary allowances, how woufd income be divided between the two members of the LLC2Next,Previous3 more Check My Work uses remaining.Check My Work

A. The division of net income of $148,000 is as below:

Answered: Dividing LLC Income Instructions Chan…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Dividing Partnership Income Beau Dawson and Willow McDonald formed a partnership, investing $180,000 and $60,000, respectively. Determine their participation in the year's net income of $290,000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 6% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $38,000 and $47,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $38,000 and $47,000, respectively, and the remainder divided equally. Dawson a. b. C. d. e. McDonald
Dividing Partnership Income Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $237,000 and that Greene is to invest $79,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are being considered: Equal division. In the ratio of original investments. In the ratio of time devoted to the business. Interest of 6% on original investments and the remainder equally Interest of 6% on original investments, salary allowances of $50,000 to Morrison and $70,000 to Greene, and the remainder equally Plan (e), except that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances Required: For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $118,000 and (2) net income of $225,000. Round answers to the nearest whole dollar. (1) (2)…
Exercise 3-1 (Divislon of Profit using Ratios) Bong. Bueno, and Bunny formed a partnership and have capital balances of P350,000, P250,000 and P200,000, respectively. They devoted time to personally managed their partnership as follows: Bong Bueno Bunny three-fourths time one-half time one-fourth time Instructions: Determine the participation of the partners in the profit of P1,000,000 if profit is divided: 1. In the ratio of capital investments 2. In the ratio of time devoted in the business Follow the instructions strictly
Exercise 3-6 (Division of Profit; Interest on Capital, Salary Allowance, and Bonus to Managing Partner) Becky and Lala formed a partnership on January 2, 2019 and agreed to share profit 90% and 10%, respectively. Becky invested cash of P200,000. Lala invested no assets but has a specialized expertise and manages the firm full time. There were no withdrawals during the year. The partnership contract provides for the following: 1. Capital accounts are to be credited annually with the interest at 10% of beginning capital. 2. Lala is to be paid a salary of P8,000 a month. 3. Lala is to receive a bonus of 25% of profit calculated before deduction of salary and interest on capital accounts. 4. Bonus, interest, and Lala's salary are to be considered as expenses. The fiscal year 2014 income statement for the partnership includes the following: P701,600 379.600 P322.000 Revenue Expenses (including salary, interest and bonus) Profit Instructions: Determine the amount of bonus to be credited to…
1 of 1 Class Activity Kand A are partners in a firm. They share profits and the losses in the ratio of 4:1. They decide to dissolve thefirm on March 31,2021, their balance sheet is as follows: Liabilities RO Assets RO Bank loan 8250 Trade mark 6600 Creditors for goods 44000 Machine 66000 Bills payable 2750 Furniture 2200 K's Capital Ac 88000 Stock 33000 A's Capital Ac 33000 Debtors Less: Provision for bad debt 49500-2200 47300 O Cash in hand O Profit & loss Ac 15400 5500 Total 176000 Total 176000 The realization shows the following results: Debtors were realized at book value less 10% Goodwill was sold for 5500 Trade mark was realized for 4400 Machinery and stock were taken over by K for 99000 An unrecorded asset was sold for 1100 A creditor for goods was settled at discount of The expenses on realization were Pass Journal Entries and Prepare Realization A/c, Capital A/cs and Cash/Bank A/c. 440 2200
Dividing LLC Income Martin 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. 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 Line Item Description Farley Clark Salary allowance 19,800 $ 13,200 Remaining income Net income Total 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) Revenues
Instructions Instructions Chart of Accounts General Journal Gavin invested $42,000 in the Jason and Kelly Partnership for ownership equity of $42,000. Prior to the investment, land was revalued to a market value of $412,000 from a book value of $211,000 Jason and Kelly share net income in a 1:2 ratio. Required: a. Provide the journal entry for the revaluation of land. b. Provide the journal entry to admit Gavin." *Refer to the Chart of Accounts for exact wording of account titles.
Attempt in Progress Ivanhoe Company reported net income of $93,300. The partnership agreement provides for salaries of $24,200 to Miley and $17,400 to Guthrie. They divide the remainder 30% to Miley and 70% to Guthrie. (a1) X Your answer is incorrect. Calculate division of net income. Miley Guthrie Division of net income 24 15510 %24 36190 eTextbook and Media
Dividing Partnership Income Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $279,000 and that Greene is to invest $93,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are being considered: Equal division. In the ratio of original investments. In the ratio of time devoted to the business. Interest of 5% on original investments and the remainder equally Interest of 5% on original investments, salary allowances of $60,000 to Morrison and $90,000 to Greene, and the remainder equally Plan (e), except that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances Required: For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $175,000 and (2) net income of $245,000. Round answers to the nearest whole dollar. (1) (2)…
Dividing partnership income Carmelo Fernandez and Bobby Morett formed a partnership, investing $70,000 and $210,000, respectively. Determine their participation in the year's net income of $280,000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $36,000 and $48,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $36,000 and $48,000, respectively, and the remainder divided equally. Fernandez a. b. C. d. e. $ 140,000 $ $ Morett 20 140,000 000
Dividing Partnership Income Beau Dawson and Willow McDonald formed a partnership, investing $100,000 and $150,000, respectively. Determine their participation in the year's net income of $290,000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 6% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $34,000 and $49,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $34,000 and $49,000, respectively, and the remainder divided equally.

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