Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Admitting a New LLC Member With Bonus Alert Medical, LLC, consists of two doctors, Abrams and Lipscomb, who share in all income and losses according

image text in transcribed
image text in transcribed
image text in transcribed
Admitting a New LLC Member With Bonus Alert Medical, LLC, consists of two doctors, Abrams and Lipscomb, who share in all income and losses according to a 2:3 income-sharing ratio. Dr. Lin has been asked to join the LLC. Prior to admitting Lin, the assets of Alert Medical were revalued to reflect their current market values. The revaluation resulted in medical equipment being increased by $25,000. Prior to the revaluation, the equity balances for Abrams and Lipscomb were $240,000 and $275,000, respectively. a. Provide the journal entry for the asset revaluation. For a compound transaction, if an amount box does not require an entry, leave it blank. Medical Equipment 25,000 10,000 Abrams, Member Equity Lipscomb, Member Equity 15,000 Feedback Check My Work a. Adjust the medical equipment and adjust each member's equity account in their income- sharing ratio. b. Provide the journal entry for the bonus under the following independent situations: 1. Lin purchased a 30% interest in Alert Medical, LLC, for $308,000. For a compound transaction, if an amount box does not require an entry, leave it blank. Cash Abrams, Member Equity Lipscomb, Member Equity Lin, Member Equity 110 Feedback Check My Work b.1. Determine the total capital, including the new contribution. Calculate the new member's share of the total capital. If the new member's contribution exceeds his share of the capital, the bonus goes to the existing members. If the new member's share of the capital exceeds the contribution, the bonus goes to the new member. 2. Lin purchased a 25% interest in Alert Medical, LLC, for $157,000. For a compound transaction, if an amount box does not require an entry, leave it blank. Feedback Check My Work b.2. Determine the total capital, including the new contribution. Calculate the new member's share of the total capital. If the new member's contribution exceeds his share of the capital, the bonus goes to the existing members. If the new member's share of the capital exceeds the contribution, the bonus goes to the new member

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

complete this problem with ERD Plus

Answered: 1 week ago