Question

133 860 a. Prepare a statement of LLC liquidation a LLC?

Answer 1

Answer: Part A

ARCADIA SALES LLC
Statement of LLC Liquidation
For the month of August , …
Particulars	Cash (A)	Non Cash Assets	Liabilities	Member's Equity (D)
		(B)	(C)
	(in $)			(in $)
		(in $)	(in $)	Lester (2)	Torres (2)	Hearst (1)
Balances as on August 1	26,590	1,41,110	33,840	47,790	56,410	29,660
Realiasation on sale of non cash assets	1,53,690	-1,41,110	0	5,032	5,032	2,516
Payment of liabilities	-33,840	0	-33,840	0	0	0
Net balance after adjustments for winding up	1,46,440	0	0	52,822	61,442	32,176
Distribution of cash to members	-1,46,440	0	0	-52,822	-61,442	-32,176
Final balances	0	0	0	0	0	0
Footnote :
1. In the table (A) + (B) = (C) + (D)
2. Profit from sale of non cash assets is distributed in the ratio of 2:2:1.

Part B

Journal entry for the distribution of cash and closing of accounts :
Particulars		Dr Amount in $	Cr Amount in $
Lester A/c		52,822
Torres A/c		61,442
Hearst A/c		32,176
Cash A/c			1,46,440
( To record of Distribution of cash to members)

Part C

Income and loss sharing ratio is not relevant for the distribution of LIC assets. At the time of liquidation, the partners are generally paid off in the ratio of their capital invested in the firm, before the date of liquidation, unless expressly mentioned otherwise. Income and loss sharing ratio is utilized to the extent of sharing of profit or loss from the sale of non cash assets at the time of winding up.