hall lang and das are members of evergreen sales llc 263028

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?

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