Question

Marvel Media, LLC, has three members: WLKT Partners, Madison Sanders, and Observer Newspaper, LLC. On January 1, 20Y2, the three members had equity of $217,500, $40,300, and $167,700, respectively. WLKT Partners contributed an additional $53,800 to Marvel Media, LLC, on June 1, 20Y2. Madison Sanders received an annual salary allowance of $56,900 during 20Y2. The members’ equity accounts are also credited with 10% 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. members. The revenues, expenses, and net income for Marvel Media, LLC, for 20Y2 were $1,235,800, 886,700 and $349,100 respectively. Amounts equal to the salary and interest allowances were withdrawn by the members.

	Required:
A.	Determine the division of income among the three members.
B.	Prepare the journal entries to close the net income and withdrawals to the individual member equity accounts. Refer to the Chart of Accounts for exact wording of account titles.
C.	Prepare a statement of members’ equity for 20Y2.
D.	What are the advantages of an income-sharing agreement for the members of this LLC? B. Prepare the journal entries to close the net income and withdrawals to the individual member equity accounts. Refer to the Chart of Accounts for exact wording of account titles. All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback. PAGE 10 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Closing Entries 2 3 4 5 6 7 8 9 10 11 12 C. Prepare a statement of members’ equity for 20Y2. Question not attempted. Score: 0/106 Marvel Media, LLC Statement of Members’ Equity For the Year Ended December 31, 20Y2 1 WLKT Partners Madison Sanders Observer Newspaper, LLC Total 2 Balances, January 1, 20Y2 3 Capital additions 4 5 Net income for the year 6 7 Member withdrawals 8 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.

Answer 1