LLC Net Income and Statement of Members' Equity

Marvel Media, LLC, has three members: WLKT Partners, Madison Sanders, and Observer Newspaper, LLC. On January 1, 20Y2, the three members had equity of $135,000, $35,000, and $80,000, respectively. WLKT Partners contributed an additional $30,000 to Marvel, Media, LLC, on June 1, 20Y2. Madison Sanders received an annual salary allowance of $78,300 during 20Y2. The members equity accounts are also credited with 15% 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 Marvel Media, LLC, for 20Y2 were $624,993, $394,993 and $230,000 respectively. Amounts equal to the salary and interest allowances were withdrawn by the members.

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

Schedule of Division of Income WLKT Partners Madison Sanders Observer Newspaper, LLC Total Salary allowance Interest allowance Remaining income (4:33) Net income b. Prepare the journal entries to close the (1) net income and (2) withdrawals to the individual member equity accounts. For a compound entry, if an amount box does not require an entry, leave it blank. WLKT Partners, Member Equity Madison Sanders, Drawing Observer Newspaper, LLC, Drawing 0110 WLKT Partners, Drawing WLKT Partners, Drawing C. Prepare a statement of members' equity for 20Y2. If an amount box does not require an entry, leave it blank. Marvel Media, LLC Statement of Members' Equity For the Year Ended December 31, 20Y2 WLKT Partners Madison Sanders Observer Newspaper, LLC Total Balances, January 1, 20Y2 Capital additions Net income for the year Member withdrawals Balances, December 31, 20Y2 $ 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