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Interactive Media, LLC, has three members: VC Partners, Colin Campella, and Active Graphics, LLC. On January 1, 20Y2, the three members had equity of $180,000,

Interactive Media, LLC, has three members: VC Partners, Colin Campella, and Active Graphics, LLC. On January 1, 20Y2, the three members had equity of $180,000, $45,000, and $110,000, respectively. VC Partners contributed an additional $50,000 to Interactive Media, LLC, on June 1, 20Y2. Colin Campella received an annual salary allowance of $104,400 during 20Y2. The members equity accounts are also credited with 12% interest on each members 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 Interactive Media, LLC, for 20Y2 were $962,121, $692,121 and $270,000, respectively. Amounts equal to the salary and interest allowances were withdrawn by the members.

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a. Determine the division of income among the three members. If an amount box does not require an entry, leave it blank.

Line Item Description VC Partners Colin Campella Active Graphics, LLC Total
Salary allowance 0 $104400 0 104400
Interest allowance 21600 5400 13200 40200
Remaining income (4:3:3) 50160 37620 37620 125400
Net income 71760 147420 50820 270000

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

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b. Journalize the entry to close the revenues and expenses to the member equity accounts. If an amount box does not require an entry, leave it blank.

Transaction Account Debit Credit
(1) Revenues 962121 0
Expenses 0 692121
VC Partners, Member Equity 0 71760
Colin Campella, Member Equity 0 147420
Active Graphics, LLC, Member Equity 0 50820

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b. Close revenues and expenses to the member equity accounts.

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c. Journalize the closing journal entry for the member withdrawals of salary and interest. If an amount box does not require an entry, leave it blank.

Transaction Account Debit Credit
(2) VC Partners, Member Equity 21600 0
Colin Campella, Member Equity ? 0
Active Graphics, LLC, Member Equity 13200 0
VC Partners, Drawing 0 21600
colin Campella, Drawing 0 ?
Active Graphics, LLC, Drawing 0 13200

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c. Close the drawing accounts to the respective equity accounts.

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d. Prepare a statement of members equity for 20Y2. If an amount box does not require an entry, leave it blank. For amounts that should be subtracted, enter the amount with a minus sign.

Line Item Description VC Partners Colin Campella Active Graphics, LLC Total
Balances, January 1, 20Y2 180000 45000 110000 335000
Investment by member 50000 0 0 50000
Net income for the year 71760 147420 50820 270000
Member withdrawals -21600 ? -13200 ?
Balances, December 31, 20Y2 280160 ? 147620 ?

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