Instructions Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $38,100 and $29,100 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:1. The two members withdrew amounts 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. Required: 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. Refer to the Chart of Accounts for exact wording of account ines C. I the net income was less than the sum of the salary allowances, how would income be divided between the two members of the LLC Chart of Accounts ASSETS Ash REVENUE 410 Revenues rating for ar 610 Interest Revenue 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Interest Receivable etion is ed: mine the 115 Notes Receivable 116 Inventory ecember of Acco net inco 117 Office Supplies 118 Store Supplies 119 Prepaid Insurance 120 Land 123 Equipment 124 Accumulated Depreciation Equipment 129 Asset Revaluations 133 Patent EXPENSES 510 Cost of Merchandise Sold 520 Salaries Experipe 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 LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 710 Interest Expense A. Determine the division of $148,000 net income for the year. Farley Clark Total Salary allowance Remaining income Net income B. On December 31, provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members. Refer to the Chart of Accounts for exact wording of account bites PAGE 1 JOURNAL ACCOUNTING EQUATION DATE POST DEBIT DESCRIPTION Closing Entries CREDIT A SSETS LARUTIESQUITY . Instructions Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $38,100 and $29,100 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:1. The two members withdrew amounts 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. Required: 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. Refer to the Chart of Accounts for exact wording of account ines C. I the net income was less than the sum of the salary allowances, how would income be divided between the two members of the LLC Chart of Accounts ASSETS Ash REVENUE 410 Revenues rating for ar 610 Interest Revenue 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Interest Receivable etion is ed: mine the 115 Notes Receivable 116 Inventory ecember of Acco net inco 117 Office Supplies 118 Store Supplies 119 Prepaid Insurance 120 Land 123 Equipment 124 Accumulated Depreciation Equipment 129 Asset Revaluations 133 Patent EXPENSES 510 Cost of Merchandise Sold 520 Salaries Experipe 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 LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 710 Interest Expense A. Determine the division of $148,000 net income for the year. Farley Clark Total Salary allowance Remaining income Net income B. On December 31, provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members. Refer to the Chart of Accounts for exact wording of account bites PAGE 1 JOURNAL ACCOUNTING EQUATION DATE POST DEBIT DESCRIPTION Closing Entries CREDIT A SSETS LARUTIESQUITY