Question

The statement of members’ equity for Bonanza, LLC, follows:

Bonanza, LLC
Statement of Members' Equity
For the Years Ended December 31, 20Y3 and 20Y4
	Idaho      Properties,      LLC,      Member      Equity		Silver      Streams,      LLC,      Member      Equity		Thomas      Dunn,      Member      Equity		Total      Members'      Equity
Members' equity, January 1, 20Y3	$1,698,000		$964,000				$2,662,000
Net income	174,000		696,000				870,000
Members' equity, December 31, 20Y3	$1,872,000		$1,660,000				$3,532,000
Dunn contribution, January 1, 20Y4	10,960		43,840		$683,200		738,000
Net income	620,000		124,000		496,000		1,240,000
Member withdrawals	(223,200)		(26,000)		(183,500)		(432,700)
Members' equity, December 31, 20Y4	$2,279,760		$1,801,840		$995,700		$5,077,300

a. What was the income-sharing ratio in 20Y3? Enter the percentage per member and then select the ratio.

Idaho Properties, LLC	%
Silver Streams, LLC	%
Ratio

b. What was the income-sharing ratio in 20Y4? Enter the percentage per member and then select the ratio.

Idaho Properties, LLC	%
Silver Streams, LLC	%
Thomas Dunn	%
Ratio

c. How much cash did Thomas Dunn contribute to Bonanza, LLC, for his interest?
$____________

d. Why do the member equity accounts of Idaho Properties, LLC, and Silver Streams, LLC, have positive entries for Thomas Dunn’s contribution?
The positive entries to Idaho Properties and Silver Streams are the result of____________ __________ Thomas Dunn.

e. What percentage interest of Bonanza did Thomas Dunn acquire?
%____________

f. Why are withdrawals less than net income?
Withdrawals will be less when the members wish to _____________ capital in the business to _________________ business growth.

Answer 1

Answer: