Question

Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $69,000 and $55,000 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.

Answer 1

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Statementshowing Computations
Paticulars	Martin Farley	Ashley Clark	Total
Net Income			148,000.00
Salary Allowance	69,000.00	55,000.00	124,000.00
Income to be divided			24,000.00
Profit and loss to be shared in 3:2	14,400.00	9,600.00	24,000.00
Total Amount to be received	83,400.00	64,600.00	148,000.00