incorrect LLC Net Income and Statement of Members' Equity

Marvel Media, LLC$,$ has three members: WLKT Partners, Madison Sanders, and Observer Newspaper, LLC$.$ On January $1,20$Y$2,$ 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 $1,20$Y$2.$ Madison Sanders received

an annual salary allowance of $$107,300$ during $20$Y$2.$ The members' equity accounts are also credited with $12\%$ 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

$$1,070,863,$$$800,863$ and $$270,000$ 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 Amounts equal to the salary and interest allowances were withdrawn by the members.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

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a$.$ Set up a column for each member and a total column. Allocate salary allowances, then distribute the remaining income based on the income sharing

agreement.

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. 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.

$(1)$

WLKT Partners, Member Equity $$

Madison Sanders, Member Equity $$

Observer Newspaper, LLC$,$ Member Equity

$(2)$

Observer Newspaper, LLC$,$ Drawing

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b$.$ Close revenues and expenses to the member equity accounts. Close the drawing accounts to the respective equity accounts. Feedback

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c$.$ Set up a column for each member and a total column. Add additional investments and net income allocations to beginning capital balances, and subtract

withdrawals to obtain ending capital for each partner and the total equity.

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.