Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio

Question:

Lester, Torres, and Hearst are members of Arcadia 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 August 1, 2016, are as follows:

Lester ........................... $ 49,000

Torres ............................. 61,000

Hearst ............................. 27,000

Total ........................... $137,000

In winding up operations during the month of August, noncash assets with a book value of $146,000 are sold for $158,000, and liabilities of $35,000 are satisfied. Prior to realization,

Arcadia Sales has a cash balance of $26,000.

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?

Distribution
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....