Dividing LLC Income Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $67,000 and $54,000 to e member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:5. The two members withdrew amounts equal to their sala allowances. Revenues were $668,000 and expenses were $520,000, for a net income of $148,000. a. Determine the division of $148,000 net income for the year. Schedule of Division of Net Income Total Farley 67,000 Clark 54,000 Salary allowance $ $ $ 121,000 Remaining income 16,200 X 10,800 27,000 Net income $ 83,200 X $ 64,800 X $ 148,000 Feedback Check My Work a. Set up a column for each partner and a total column. Allocate salary allowances, then distribute the remaining income based on the income sharing agreement. b. Provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members. For a compound transaction, if an amoun does not require an entry, leave it blank. (1) Revenues 668,000 Feedback Check My Work a. Set up a column for each partner and a total column. Allocate salary allowances, then distribute the remaining income based on the income sharing agreement. b. Provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members. For a compound transaction, if an amoun does not require an entry, leave it blank. (1) Revenues 668,000 Expenses 52,000 Martin Farley, Member Equity 83,200 Ashley Clark, Member Equity 64,800 (2) Martin Farley, Member Equity 67,000 Ashley Clark, Drawing 54,000 Martin Farley, Drawing 67,000 Ashley Clark, Drawing 54,000 C. If the net income were 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 were less than the sum of the salary allowances, both members would still be credited with their salary allowances. The difference between the net income and total salary allowances would be allocated to each partner as a deduction according to the income-sharing ratio