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Determine the division of net income for the year

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Dividing LLC Income

Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $57,000 and $46,000 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.

Question 1a. Determine the division of $148,000 net income for the year.

Schedule of Division of Net IncomeFarleyClarkTotal

  1. Salary allowance. 
  2. Remaining income.
  3. Net income

Question 1b. Provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members.

Reference no: EM132473420

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