1. 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 to realization, Arcadia Sales has a cash balance of $26,590.

	Required:
a.	Prepare a statement of LLC liquidation.
b.	Provide the journal entry for the final cash distribution to members on August 31. Refer to the Chart of Accounts for exact wording of account titles.
c.	What is the role of the income- and loss-sharing ratio in liquidating a LLC?

c. What is the role of the income- and loss-sharing ratio in liquidating a LLC? Select the best answer to complete the two sentences below.

1. The income- and loss-sharing ratio is

often used for the final distribution.

only used to distribute the gain or loss on the realization of asset sales.

never used in a Limited Liability Company liquidation.

2. After all gains and losses on realization have been divided and any member deficiencies have been paid or allocated, the final distribution is based upon

the credit balances in the member equity accounts.

the partners wishes.

the income- and loss-sharing ratio.

2. Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 22,000 shares of cumulative preferred 4% stock, $140 par, and 73,000 shares of $5 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $82,500; second year, $173,900; third year, $211,900; fourth year, $232,700.

Compute the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0".

	1st Year	2nd Year	3rd Year	4th Year
Preferred stock (dividend per share)	$	$	$	$
Common stock (dividend per share)	$	$	$	$

3. Lightfoot Inc., a software development firm, has stock outstanding as follows: 30,000 shares of cumulative preferred 2% stock, $20 par, and 38,000 shares of $125 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $4,500; second year, $7,500; third year, $54,020; fourth year, $114,220.Calculate the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0".

	1st Year	2nd Year	3rd Year	4th Year
Preferred stock (dividend per share)	$	$	$	$
Common stock (dividend per share)	$	$	$	$

4. Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 25,000 shares of preferred 2% stock, $100 par and 500,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations:

July	1	Issued 220,000 shares of common stock at par for cash.
	1	Issued 700 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
Aug.	7.	Issued 68,700 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $153,800, $458,110 and $164,400 respectively.
Sept.	20.	Issued 18,200 shares of preferred stock at $115 for cash.

Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

5. The declaration, record, and payment dates in connection with a cash dividend of $129,100 on a corporations common stock are January 12, March 13, and April 12.

Journalize the entries required on each date. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

6.

Lawn Spray Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On January 31 of the current year, Lawn Spray Inc. reacquired 18,000 shares of its common stock at $19 per share. On June 14, 13,500 of the reacquired shares were sold at $27 per share, and on November 23, 3,200 of the reacquired shares were sold at $20.

Required:

A.	Journalize the transactions of January 31, June 14, and November 23. Refer to the Chart of Accounts for exact wording of account titles.
B.	What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
C.	What is the balance in Treasury Stock on December 31 of the current year?
D.	How will the balance in Treasury Stock be reported on the balance sheet?

7.

Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year, Biscayne Bay Water Inc. reacquired 21,350 shares of its common stock at $65 per share. On September 6, Biscayne Bay Water Inc. sold 12,450 of the reacquired shares at $71 per share. The remaining 8,900 shares were sold at $62 per share on November 30.

Required:

A.	Journalize the transactions of May 14, September 6, and November 30. Refer to the Chart of Accounts for exact wording of account titles.
B.	What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
C.	Where will the balance in Paid-In Capital from Sale of Treasury Stock be reported on the balance sheet?
D.	For what reasons might Biscayne Bay Water Inc. have purchased the treasury stock?