Homework SourseMarvel Media LLC has three members WLKT Partners Madison San
Marvel Media, LLC, has three members: WLKT Partners, Madison Sanders, and Observer Newspaper, LLC. On January 1, 2016, the three members had equity of $200,000, $40,000, and $160,000, respectively. WLKT Partners contributed an additional $50,000 to Marvel Media, LLC, on June 1, 2016. Madison Sanders received an annual salary allowance of $55,000 during 2016. 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. The net income for Marvel Media, LLC, for 2016 was $360,000. Amounts equal to the salary and interest allowances were withdrawn by the members.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 2016. |
Solution
a. Determine the division of income among the three members.
b. Prepare the journal entry to close the revenues, expenses, and withdrawals to the individual\'s member equity accounts.
( interest @ 10% on opening capital withdrawn by partners, and Madison also withdrawn salary )
c. Prepare a statement of members\' equity for 2016.
| Net income | $ 360,000.00 | |
| Ratio | 4.3.3 | |
| Weight | Share | |
| WLKT partners | 4 | $144,000.00 |
| madison | 3 | $108,000.00 |
| Observer | 3 | $108,000.00 |
| Total | 10 | $360,000.00 |
