Dividing LLC IncomeMartin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided asalary allowance of $40,000 and $30,000 to each member, respectively. In addition, the operating agreementspecified 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 IncomeSalary allowanceRemaining incomeNet incomeFeedbackFarley40,000Clark30,000 ✓ $Total70,00078,000148,000▼ Check My Worka. Set up a column for each partner and a total column. Allocate salary allowances, then distribute theremaining income based on the income sharing agreement.h Provide journal entries to close the (1) revenues and ovnences and (2) drawing accounts for the two (1)Feedback(2)▼ Check My Workb. Provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the twomembers. For a compound transaction, if an amount box does not require an entry, leave it blank.a. Set up a column for each partner and a total column. Allocate salary allowances, then distribute theremaining income based on the income sharing agreement.RevenuesExpensesFeedback

The salary allowance and interest on capital are provided to the partners from the net income. The…

Answered: Dividing LLC Income Martin Farley and…

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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Lynn Carpenter and Matthew Fredrick formed a partnership in which the partnership agreement provided for salary allowances of $58,000 and $41,000, respectively. Determine the division of a $33,000 net loss for the current year, assuming that remaining income or losses are shared equally by the two partners. Use the minus sign to indicate any deductions or deficiencies. Lynn Carpenter Matthew Fredrick Total Salary Allowance 58,000 $ 41,000 99,000 Remainder $ $ $ Net Loss $ $ Feedback
Dividing LLC Income Instructions Chan of Accounts euinalFr Qestion Starting Quesien Instructions Martin 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, Revenues were $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 to the 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…
What of the following is NOT a typical term in the contract between GPs and LPs (LPA: limited partnership agreement)? Group of answer choices a. LPA is designed to align the interests of the GP with the limited partners (LPs) using a profit-sharing agreement of private equity. b. At the exit, the LPs receive the capital that was invested in the company and the profits are split. c. The LPs typically receive 20 percent and the GPs 80 percent of the capital gain.
answer in good accounting form
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
Dividing Partnership Income. Tyler Hawes and Piper Albright formed a partnership, investing $210,000 and $70,000, respectively. Determine their participation in the year's net income of $110,000 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 2:2. d. Salary allowances of $40,000 and $48,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $40,000 and $48,000, respectively, and the remainder divided equally. Hawes Albright (a) (b) (c) (d) (e) 00000 00000
Dividing partnership income Carmelo Fernandez and Bobby Morett formed a partnership, investing $187,500 and $62,500, 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 5% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $38,000 and $45,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $38,000 and $45,000, respectively, and the remainder divided equally. Fernandez Morett a. b. C. d. e.
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
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Dividing Partnership Income Black and Shannon have decided to form a partnership. They have agreed that Black is to invest $255,000 and that Shannon is to invest $85,000. Black is to devote one-half time to the business, and Shannon 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 $50,000 to Black and $75,000 to Shannon, and the remainder equally. Plan (e), except that Shannon 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 $157,000 and (2) net income of $215,000. Round answers to the nearest whole dollar. (1) (2)…
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 IncomeBeau Dawson and Willow McDonald formed a partnership, investing $120,000 and $ 180,000, respectively.Determine their participation in the year's net income of $295,000 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 $38,000 and $50,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $38,000 and $50,000, respectively, and the remainder divided equally.

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