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 limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows: Lester 553 120 Torres 55,790 Hearst 26,560 Total $135,470 In winding up operations during the month of August, noncash assets with a book value of $157,550 are sold for $170,590, and liabilities of S47 430 are satisfied. Prior to realization, Arcadia Sales has a cash balance of 525,350, Required: a. Prepare a statement of LLC liquidation Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter negative numbers (Dafance deficiencies, payments, cash distributions divisions of loss), use a minus sign. I there is no amount to be reported for sale of assets, payment or Nabbles, receipt of deficiency, or cash distribution rows, the cercando fer blank. However, in the balance rows a balance of zero MUST be indicated by entering og b. Provide the journal entry for the final cash distribution to members on August 31 Refer to the chart of accounts for the exact wording of the account teles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debitor credit entries CNOW journals will automatically indent a credit entry when a credit amount is entered What is the role of the income and loss-sharing ratio in quidating an LLC? a. Prepare a statement of LLC Aquidation. Refer to the Ast of Amount Descriptions for the exact wording of the answer choices for text entries. For those bores in which negative numbers (balance deficiencies, payments, cash distributions divisions of loss), use a minus sign. If there is no amount to be reported for sale of assets, paymer receipt of deficiency, or cash distribution rows, the cell can be left blank. However, in the balance rows a balance of zero MUST be indicated by entering ARCADIA SALES, LLC Statement of LLC Liquidation For the Period August 1-31 Me Cash Moncash Assets Liabilities Member Equity Lester (2/5) Member Equity Torres (2/5) H 2 4 3 6 7 b. Provide the journal entry for the final cash distribution to members on August 31. Refer to the chart of accounts for the exact wording of the account titles CNOWjour do not use lines for journal explanations Every ine on a journal page is used for debat or credit entries. CNOW journals will automatically indent a credit entry when a cre amount is entered PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REF DEBIT CREDIT ASSETS LIBRITIES EQUITY 1 2 J c What is the role of the income and loss-sharing ratio in liquidating an LLC? Select the best answer to complete the two sentences below. 1. The income and loss-sharing ratio is O never used in a Limited Liability Company liquidation O only used to distribute the gain or loss on the realization of asset sales O often used for the final distribution 2. After all gains and losses on realization have been divided and any member deficiencies have been paid or allocated the final distribution is based upon the partners wishes the credit balances in the member equity accounts the income- and loss-sharing ratio
