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Lopez and Gomez are members in an LLC that reports net income of $146,000. An agreement states that Lopez receives a $21,600 salary allowance and
Lopez and Gomez are members in an LLC that reports net income of $146,000. An agreement states that Lopez receives a $21,600 salary allowance and Gomez receives a $51,600 salary allowance. Any remaining income or loss is to be shared by Lopez and Gomez in a 4:1 ratio (in percents: Lopez, 80%; Gomez, 20%). 1. Determine each members share of net income. 2. Prepare the entry to record the closing of Income Summary. Hint: The business is a limited liability company (LLC), so equity accounts are Lopez, Member Equity and Gomez, Member Equity.
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