Question

LLC Net Income and Statement of Members' Equity Marvel Media, LLC, has three members: WLKT Partners, Madison Sanders, and Observer Newspaper, LLC. On January 1, 202, the three members had equity of $230,000, $60,000, and $140,000, respectively. WLKT Partners contributed an additional $60,000 to Marvel, Media, LLC, on June 1, 20Y2. Madison Sanders received an annual salary allowance of $133,400 during 2042. The members' equity accounts are also credited with 15% interest on each member's January 1 capital balance. Any remaining income is to be shared in the ratio of 4:3:3 among the three members. The revenues, expenses, and net income for Marvel Media, LLC, for 20Y2 were $902,091, $502,091 and $400,000 respectively. Amounts equal to the salary and interest allowances were withdrawn by the members. a. Determine the division of income among the three members. If an amount box does not require an entry, leave it blank. Schedule of Division of Income WLKT Partners Madison Sanders Observer Newspaper, LLC Total Salary allowance Interest allowance Remaining income (4:33) Net income b. Prepare the journal entries to close the (1) net income and (2) withdrawals to the individual member equity accounts. For a compound entry, if an amount box does not require an entry, leave it blank. (1) Revenues Expenses WLKT Partners, Member Equity Lll1 Madison Sanders, Member Equity Observer Newspaper, LLC, Member Equity WLKT Partners, Member Equity Madison Sanders, Member Equity Observer Newspaper, LLC, Member Equity WIKT Partnere Drawinn

Answer 1

31 a. Determine the division of income among the three members. Salary allowance Interest allowance Remaining income (400000-133400-64500)in(4:33) Net income Schedule of Division of Income WLKT Partners Madison Sanders Observer Newspaper, LLC 133,400 34,500 9,000 21,000 80,840 60,630 60,630 115,340 203,030 81,630 Total 133,400 64,500 202,100 400,000 40 b. Prepare the journal entries to close the (1) net income and (2) withdrawals to the individual member equity accounts Credit Debit 902,091 Account title & explanation Revenues Expenses WLKT Partners, Member Equity Madison Sanders, Member Equity Observer Newspaper, LLC, Member Equity 502,091 115,340 203,030 81,630 34,500 142,400 21,000 WLKT Partners, Member Equity Madison Sanders, Member Equity Observer Newspaper, LLC, Member Equity WLKT Partners, Drawings Madison Sanders, Drawings Observer Newspaper, LLC,Drawings 34,500 142,400 21,000

c. Prepare a statement of members' equity for 20Y2. Balances, January 1, 20Y2 Capital additions Marvel Media, LLC Statement of Members' Equity For the Year Ended December 31, 20Y2 WLKT Partners Madison Sanders Observer Newspaper, LLC 230,000 60,000 140,000 50,000 280,000 60,000 140,000 115,340 203,030 81,630 395,340 263,030 221,630 34,500 142,400 21,000 360,840 120,630 200,630 Total 430,000 50,000 480,000 400,000 880,000 197,900 682,100 Net income for the year Member withdrawals Balances, December 31, 20Y2 69 70