Marvel 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, 20Y2, the three members had equity of $205,000, $50,000, and $125,000, respectively. WLKT Partners contributed an additional $50,000 to Marvel, Media, LLC, on June 1, 20Y2. Madison Sanders received an annual salary allowance of $118,900 during 20Y2. The members\' equity accounts are also credited with 15% 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 revenues, expenses, and net income for Marvel Media, LLC, for 20Y2 were $1,028,988, $678,988 and $350,000 respectively. Amounts equal to the salary and interest allowances were withdrawn by the members a. Determine the division of income among the three members. If an amount box does not require an entry, leave it blank Schedule of Division of Income WLKT Partners Madison Sanders Observer Newspaper, LLC Total Salary allowance Interest allowance Remaining income (4:3:3) Net income

Solution

Allocation of Income among partners Case-a: WLKT Sanders Observer TOTAL Salary Allowance 118900 118900 Interest allowance 30750 7500 18750 57000 Remaining Income (4:3:3) 69640 52230 52230 174100 Net income 100390 178630 70980 350000 Req b: Closing entries: Revenues Account Dr. 1028988      Expense Account 678988      WLKT capital account 100390      Sanders Capital Account 178630      Observer Capital Account 70980 WLKT capital Account Dr. 30750 Sanders capital Account Dr. 126400 Observer capital account Ddr. 18750     WLKT Withdrawals account 30750     Sanders withdrawals account 126400     Observer Withdrawals account 18750 Req c: Statement of Member\'s equity WLKT Sanders Observers Total Balance Jan1 205000 50000 125000 380000 Contributions 50000 50000 255000 50000 125000 430000 Net income for t he year 100390 178630 70980 350000 355390 228630 195980 780000 Member withdrawals 30750 126400 18750 175900 Balance Dec 31 324640 102230 177230 604100 Rreq d: Without an income sharing agreement, each member will be credited with an equal proportion of total earnings Separate contribution shall not be acknowledged in income sharing formula.