a. Determine the division of $148,000 net income for the year. c. If the net income was less than the sum of the salary allowances, how would income be divided between the two members of the LLC? If the net income of the LLC was less than the sum of the salary allowances, both members would still be allowances would be allocated to each partner as a with their salary allowances. From this amount, each partner would , according to the income-sharing ratio. is or her share of the excess of the total salary allowance over the net income. Thus, the difference between the net income and total salary CHART OF ACCOUNTS Farley and Clark General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Interest Receivable 115 Notes Receivable 116 Inventory 117 Office Supplies 118 Store Supplies 119 Prepaid Insurance 120 Land 123 Equipment 124 Accumulated Depreciation-Equipment 129 Asset Revaluations 133 Patent LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable REVENUE 410 Revenues 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Equipment 523 Delivery Expense 524 Repairs Expense 529 Expenses 531 Rent Expense 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense EQUITY 310 Martin Farley, Member Equity 311 Martin Farley, Drawing 312 Ashley Clark, Member Equity 313 Ashley Clark, Drawing b. On December 31, provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members. equal to their salary allowances. Revenues were $668,000 and expenses were $520,000, for a net income of $148,000. Note: The reduction in members' equity from withdrawals would be disclosed on the statement of members' equity. a. Determine the division of $148,000 net income for the year. b. On December 31, provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members. c. If the net income was less than the sum of the salary allowances, how would income be divided between the two members of the LLC