Solution:
a.)
Cash + | Noncash Assets = | Liabilities + |
Member Equity Lester + (2/5) |
Member Equity Torres +(2/5) | Member Equity Hearst (1/5) | |
Balance before realization | $8,700 | $92,100 | $30,800 | $14,700 | $34,100 | $21,200 |
Sales of assets and division of gain | +114,200 | - $92,100 | ___ | +$8,840($114,200 - $92,100 =$22,100, $22,100 × 2/5) | $8,840 ($22,100 ×2/5) | $4,420($22,100 × 1/5) |
Balance after realization | $122,900 | $0 | $30,800 | $23,540 | $42,940 | $25,620 |
Payment of liabilities | - $30,800 | ___ | - $30,800 | _____ | ____ | ____ |
Balance after payment of liabilities | $92,100 | $0 | $0 | $23,540 | $42,940 | $25,620 |
Cash distributed to members | - $92,100 | ___ | ____ | - $23,540 | -$42,940 | - $25,620 |
Final balance | $0 | $0 | $0 | $0 | $0 | $0 |
b.)
Journal entry:
No.of event | General Journal | Debit | Credit |
1 | Lester, Member Equity | $23,540 | |
Torres, Member Equity | $42,940 | ||
Hearst, Member Equity | $25,620 | ||
Cash | $92,100 | ||
(To record the final cash distribution to members) |
c.)
The income and loss - sharing ratio is only used to distribute the gain or loss on the realization of assets sales. It is not used for the final distribution.
Statement of LLC Liquidation Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income...
Statement of LLC Liquidation Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows: Lester $28,800 Torres 66,600 Hearst 41,400 Total $136,800 In winding up operations during the month of August, noncash assets with a book value of $180,000 are sold for $223,200, and liabilities of...
Statement of LLC Liquidation Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows: Lester $22,100 Torres 51,200 Hearst 31,800 Total $105,100 In winding up operations during the month of August, noncash assets with a book value of $138,400 are sold for $171,600, and liabilities of...
Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members’ equity prior to liquidation and asset realization on August 1 are as follows: Lester $47,790 Torres 56,410 Hearst 29,660 Total $133,860 In winding up operations during the month of August, noncash assets with a book value of $141,110 are sold for $153,690, and liabilities of $33,840 are satisfied. Prior...
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