LaToya Bennings and Lamar Hodges formed a limited liability corporation (LLC) with an operating agreement that provided

Question:

LaToya Bennings and Lamar Hodges formed a limited liability corporation (LLC) with an operating agreement that provided a salary allowance of $32,000 and $53,000 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:2. The two members withdrew amounts equal to their salary allowances.

a. Determine the division of $106,000 net income for the year.

b. Provide journal entries to close the

(1) Income summary

(2) Drawing accounts for the two members.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...