Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $40,000 and $30,000 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.
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- Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $40,000 and $30,000 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. 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 two members. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount…Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $40,000 and $30,000 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.b. Provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members.c. If the net income was less than the sum of the salary allowances, how would income be divided between the two members of the LLC?Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $40,000 and $30,000 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 $ 40,000 $ 30,000 $ 70,000 Remaining income 46,800 31,200 78,000 Net income 86,800 61,200 148,000 Feedback V Check My Work a. Set up a column for each partner and a total column. Allocate salary allowances, then distribute the remaining income based on the income sharing agreement. 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)…
- Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $40,000 and $30,000 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. 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.Bee, Cee and Dee, accountants, agree to form a partnership and to share profits in the ratio of 5:3:2. They also agreed that Dee is to be lowed a salary of P 28,000 and that Cee is to be guaranteed P 21,000 as his share of the profits. During the first year of operation, service revenue are P 180,000, while expenses total P 96,000. What amount of net income should be credited to Bee's capital account? What amount of net income should be credited to Dee's capital account?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 Farley Clark Total Salary allowance $fill in the blank 996889042f95077_1 $fill in the blank 996889042f95077_2 $fill in the blank 996889042f95077_3 Remaining income fill in the blank 996889042f95077_4 fill in the blank 996889042f95077_5 fill in the blank 996889042f95077_6 Net income $fill in the blank 996889042f95077_7 $fill in the blank 996889042f95077_8 $fill in the blank 996889042f95077_9 Question Content Area b. Provide journal…
- Bee, Cee and Dee, accountants, agree to form a partnership and to share profits in the ratio of 5:3:2. They also agreed that Dee is to be allowed a salary of P 28,000 and that Cee is to be guaranteed P 21,000 as his share of the profits. During the first year of operation, service revenue are P 180,000, while expenses total P 96,000. What amount of net income should be credited to Bee's capital account?Instructions Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $36,500 and $30,300 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. 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 two members. c. If the net income was less than the sum of the salary allowances, how would income be divided between the two members of the LLC? First Question a. Determine the division of $148,000 net income for the year. Salary allowance $ Remaining income Net income $ Farley $ $ Clark…Jhumpa, Stewart, and Kelly are all one-third partners in the capital and profits of Firewalker General Partnership. In addition to their normal share of the partnership's annual income, Jhumpa and Stewart receive an annual guaranteed payment of $10,000 each to compensate them for additional services they provide. Firewalker's income statement for the current year reflects the following revenues and expenses: Sales revenue Interest income Long-term capital gains Cost of goods sold Employee wages Depreciation expense Guaranteed payments Miscellaneous expenses (20,000) (4,500) Overall net income $ 97,000 Note: Leave no answer blank. Enter zero if applicable. Description Problem 09-64 Part b (Static) b. How will Firewalker allocate ordinary business income and separately stated items to its partners? Note: Round your intermediate calculations and final answers to the nearest whole dollar amount. Interest income Long-term capital gain Guaranteed payments Self-employment income $ 340,000…
- The Smith and Jones partnership agreement stipulates that profits and losses will be shared equally after salary allowances of $160,000 for Smith and $80,000 for Jones. At the beginning of the year, Smith's Capital account had a balance of $320,000, while Jones' Capital account had a balance of $280,000. Net income for the year was $200.000. The balance of Jones' Capital account at the end of the year after closing is Essay Toolbar navigation B I U S E E E vPaddison and Wager have formed a partnership. During their first year of operations, the partnership earned $160,000. Their-profit-and-loss-sharing agreement states that, first, each partner will receive 20% of their capital balances. The second level is based on services, with $10,000 to Paddison and $20,000 to Wager. The remainder then will be shared 4:1 between Paddison and Wager, respectively. Read the requirements. ..... Requirement 1. Calculate the amount of income each partner will receive under their profit-and-loss-sharing agreement assuming Paddison's capital balance is $91,000 and Wager's capital balance is $91,000. (Complete all answer boxes. For amounts that are $o, make sure to enter "0" in the appropriate column.) Paddison Wager Total Net income (Iloss) Requirements Capital allocation: Paddison 1. Calculate the amount of income each partner will receive under their profit-and-loss-sharing agreement assuming Paddison's capital balance is $91,000 and Wager's capital…Rockford, Skeeba, and Tapinski are partners in a business which manufactures specialty railings. Their profit and loss agreement provides for the allocation of profits and losses as follows: 1. Salaries of $50,000, $40,000, and $55,000 for Rockford, Skeeba, and Tapinski, respectively. 2. Skeeba will receive a bonus equal to 5% of sales in excess of $1,000,000. 3. All partners will receive a bonus of 10% of net income in excess of $150,000 after their bonus. 4. Partners will be allocated interest on their weighted-average capital balance to the extent that it exceeds $50,000. Drawings in excess of annual salaries will be considered a reduction in capital. Interest is computed at the rate of 10%. 5. Remaining profits or losses will be allocated 35%, 25%, and 40% to Rockford, Skeeba, and Tapinski, respectively.6. Gains or losses from the sale of depreciable assets will be excluded from the above provisions and will be equally allocated between Rockford and Tapinski. Activity in the…