Hall, Lang, and Das are members of Evergreen Sales, LLC, sharing income and losses in the ratio
Question:
Hall, Lang, and Das are members of Evergreen 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 May 1, 2012, are as follows:
Hall ...... $37,000
Lang ...... 40,000
Das ....... 18,000
Total ...... $95,000
In winding up operations during the month of May, noncash assets with a book value of $107,000 are sold for $123,000, and liabilities of $25,000 are satisfied. Prior to realization, Evergreen Sales has a cash balance of $13,000.
a. Prepare a statement of LLC liquidation.
b. Provide the journal entry for the final cash distribution to members.
c. What is the role of the income- and loss-sharing ratio in liquidating a LLC?
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....
Step by Step Answer:
a b Hall Member Equity 43400 Lang Member Equity 46400 Das Member Equity 21200 Cash 111000 c The inco...View the full answer
