Statement of LLC Liquidation

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	$30,300
Torres	70,000
Hearst	43,500
Total	$143,800

In winding up operations during the month of August, noncash assets with a book value of $189,300 are sold for $234,700, and liabilities of $62,400 are satisfied. Prior to realization, Arcadia Sales has a cash balance of $16,900.

Question Content Area

a. Prepare a statement of LLC liquidation. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If an amount is zero, enter "0".

b. Provide the journal entry for the final cash distribution to members. If an amount box does not require an entry, leave it blank. c. What is the role of the income- and loss-sharing ratio in liquidating an LLC? The income- and loss-sharing ratio is only used to on the realization of asset sales. It used for the final distribution