The two members of Hoosiephaffer LLC, a limited liability company, operate their business such that it shows a profit for the year of $63,000. Their LLC operating agreement calls for them to share the profits in the ratio 5:4.
How much of the profit should go to the member who gets the larger share?
- $35,000
- $28,000
- $32,000
- $36,000
Answer(s): A
Explanation:
If the profits are shared in the ratio 5:4, one partner gets 5/9 of the profits and the other gets 4/9. Note that 5/9 +
4/9 = 1, the whole profit. The larger share is 5/9 of the profit, $35,000.
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