LLC Net Income and Statement of Members’ Equity Marvel Media, LLC, has three members: WLKT Partners,

LLC Net Income and Statement of Members’ Equity Marvel Media, LLC, has three members: WLKT Partners, MadisonSanders, and Observer Newspaper, LLC. On January 1, 20Y2, the threemembers had equity of $160,000, $40,000, and $95,000, respectively.WLKT Partners contributed an additional $40,000 to Marvel, Media,LLC, on June 1, 20Y2. Madison Sanders received an annual salaryallowance of $92,800 during 20Y2. The members’ equity accounts arealso credited with 18% interest on each member’s January 1 capitalbalance. Any remaining income is to be shared in the ratio of 4:3:3among the three members. The revenues, expenses, and net income forMarvel Media, LLC, for 20Y2 were $823,486, $513,486 and $310,000respectively. Amounts equal to the salary and interest allowanceswere withdrawn by the members. a. Determine the division of income among thethree members. If an amount box does not require an entry, leave itblank. b. Prepare the journal entries to close the (1)net income and (2) withdrawals to the individual member equityaccounts. For a compound entry, if an amount box does not requirean entry, leave it blank. c. Prepare a statement of members’ equity for20Y2. If an amount box does not require an entry, leave itblank. d What are the advantages of an income-sharingagreement for the members of this LLC? Without an income-sharing agreement, each member be creditedwith an equal proportion of the total earnings, or one-third each.Separate contributions be acknowledged in the income-sharingformula. . . .

 

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