Ch 12-3 Exercises and Problems LLC Net Income and Statement of Members' Equity Marvel Media, LLC, has three members: WLKT Partners, Madison Sanders, and Observer Newspaper, LLC. On January 1, 20Y2, the three members had equity of $185,000, $45,000, and $110,000, respectively. WLKT Partners contributed an additional $50,000 to Marvel, Media, LLC, on June 1, 20Y2. Madison Sanders received an annual salary allowance of $107,300 during 2012. The members' equity accounts are also credited with 18% interest on each member's January 1 capital balance. Any remaining income is to be shared in the ratio of 4:3:3 among the three members. The revenues, expenses, and net income for Marvel Media, LLC, for 20Y2 were $577,603, $217,603 and $360,000 respectively. Amounts equal to the salary and interest allowances were withdrawn by the members. a. Determine the division of income among the three members. If an amount box does not require an entry, leave it blank. Schedule of Division of Income WLKT Partners Observer Newspaper, Total Madison Sanders 107,300 LLC 107,300 9,000 Salary allowance Interest allowance Remaining income (4:33) Net income h. Prenare the inurnal entries to rince the 11 net income and withdrawals to the naatinua Mas b. Prepare the journal entries to close the (1) net income and (2) withdrawals to the individual member equity accounts. For a compound entry, if an amount box does not require an entry, leave it blank. Revenues C. Prepare a statement of members' equity for 2012. If an amount box does not require an entry, leave it blank. c. Prepare a statement of members' equity for 2012. If an amount box does not require an entry, leave it blank. Marvel Media, LLC Statement of Members' Equity For the Year Ended December 31, 20Y2 WLKT Madison Observer Newspaper, " Partners Sanders LLC Total Balances, January 1, 2012 Capital additions Net income for the year Member withdrawals Balances, December 31, 2012 d What are the advantages of an income-sharing agreement for the members of this LLC? Without an income-sharing agreement, each member be credited with an equal proportion of the total earnings, or one-third each. Separate contributions be acknowledged in the income sharing formula