Lester, Torres, and Hearst are members of Arcadia sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the LLC. The members equity prior to liquidation and asset realization on August 1 are as follows:

Lester-$12,400

Torres-$28,700

Hearst-$17,800

Total-$58,900

in winding up operations during the month of august , no cash assets with a book value of $77,500 are sold for $96,100 and liabilities of $25,700 are satisfied. Prior to realization, Arcadia sales has a cash balance of $7,100. A. Prepare a statement of LLC liquidation. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. B. Provide the journal entry for the final cash distribution to members. 1. Accounts payable, cash, Hearst drawing, Lester member equity, Torres drawing

2. Accounts receivable, cash, Hearst drawing, Lester drawing, torres member equity

3 accounts payable, cash, Hearst member equity, Lester drawing, torres drawing

4. Cash, Hearst drawing, Hearst member equity, Lester member equity, torres member equity

C. what is the role of the income- and loss-sharing ratio in liquidating an LLC?

1. The income- and loss-sharing ratio is only used to distribute the gain or loss/determine the amount of cash to distribute/allocate equity on the realization of asset sales. It is/is not used for the final distribution.