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Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $36,400 and $28,100 to each
Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $36,400 and $28,100 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:1. The two members withdrew amounts equal to their salary allowances.
Note: The reduction in members equity from withdrawals would be disclosed on the statement of members equity.
B. | On December 31, provide journal entries to close the (1) income summary and (2) drawing accounts for the two members. Refer to the Chart of Accounts for exact wording of account titles. |
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