LLC Net Income and Statement of Members' Equity

Exploit Media, LLC$,$ has three members: WACS Partners, Elyse O$$Reilly$,$ and Encounter Newspaper, LLC$.$ On January $1,20$Y$2,$ the three members had equity of $$275,000,$ $$55,000,$ and $$220,000,$ respectively. WACS Partners contributed an additional $$69,000$ to Exploit Media, LLC$,$ on June $1,20$Y$2.$ Elyse O$$Reilly received an annual salary allowance of $$76,000$ during $20$Y$2.$ The members$$ equity accounts are also credited with $10\%$ interest on each member$$s January $1$ capital balance. Any remaining income is to be shared in the ratio of $4$:$3$:$3$ among the three members. The revenues, expenses, and net income for Exploit Media, LLC$,$ for $20$Y$2$ were $$1,730,000,$ $$1,236,000,$ and $$494,000,$ respectively. Amounts equal to the salary and interest allowances were withdrawn by the members.

Question Content Area

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

blank

Schedule of Division of Income

WACS Partners Elyse O'Reilly Encounter Newspaper, LLC Total

Salary allowance fill in the blank $8$f$5$e$42$ff$4$fd$0070\_1$

$fill in the blank $8$f$5$e$42$ff$4$fd$0070\_2$

fill in the blank $8$f$5$e$42$ff$4$fd$0070\_3$

$fill in the blank $8$f$5$e$42$ff$4$fd$0070\_4$

Interest allowance $fill in the blank $8$f$5$e$42$ff$4$fd$0070\_5$

fill in the blank $8$f$5$e$42$ff$4$fd$0070\_6$

$fill in the blank $8$f$5$e$42$ff$4$fd$0070\_7$

fill in the blank $8$f$5$e$42$ff$4$fd$0070\_8$

Remaining income $(4$:$3$:$3)$ fill in the blank $8$f$5$e$42$ff$4$fd$0070\_9$

fill in the blank $8$f$5$e$42$ff$4$fd$0070\_10$

fill in the blank $8$f$5$e$42$ff$4$fd$0070\_11$

fill in the blank $8$f$5$e$42$ff$4$fd$0070\_12$

Net income $fill in the blank $8$f$5$e$42$ff$4$fd$0070\_13$

$fill in the blank $8$f$5$e$42$ff$4$fd$0070\_14$

$fill in the blank $8$f$5$e$42$ff$4$fd$0070\_15$

$fill in the blank $8$f$5$e$42$ff$4$fd$0070\_16$

b$.$ Prepare the journal entries to close the $(1)$ revenues, expenses, and $(2)$ withdrawals to the individual member equity accounts. If an amount box does not require an entry, leave it blank.

$(1)$

$(2)$

c$.$ Prepare a statement of members' equity for $20$Y$2.$ If an amount box does not require an entry, leave it blank.

Exploit Media, LLC

Statement of Members' Equity

For the Year Ended December $31,20$Y$2$

WACS Partners Madison Nelson Encounter Newspaper, LLC Total

Balances, January $1,20$Y$2$ $fill in the blank $20274103306$a$04$f$\_1$

$fill in the blank $20274103306$a$04$f$\_2$

$fill in the blank $20274103306$a$04$f$\_3$

$fill in the blank $20274103306$a$04$f$\_4$

Capital additions fill in the blank $20274103306$a$04$f$\_5$

fill in the blank $20274103306$a$04$f$\_6$

fill in the blank $20274103306$a$04$f$\_7$

fill in the blank $20274103306$a$04$f$\_8$

Net income for the year fill in the blank $20274103306$a$04$f$\_9$

fill in the blank $20274103306$a$04$f$\_10$

fill in the blank $20274103306$a$04$f$\_11$

fill in the blank $20274103306$a$04$f$\_12$

Member withdrawals fill in the blank $20274103306$a$04$f$\_13$

fill in the blank $20274103306$a$04$f$\_14$

fill in the blank $20274103306$a$04$f$\_15$

fill in the blank $20274103306$a$04$f$\_16$

Balances, December $31,20$Y$2$ $fill in the blank $20274103306$a$04$f$\_17$

$fill in the blank $20274103306$a$04$f$\_18$

$fill in the blank $20274103306$a$04$f$\_19$

$fill in the blank $20274103306$a$04$f$\_20$

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.