Warren Burggren and Justin Beavers operate a retail furniture store. Under the terms of the partnership agreement, Burggren is authorized to withdraw $9,000 a month and Beavers $7,500 a month. The withdrawals, which are not considered to be salaries, were made each month and charged to the drawing accounts. The partners have agreed that net income or loss is to be allocated 40 percent to Burggren and 60 percent to Beavers. For the year ended December 31, 20X1, the partnership earned a net income of $380,000.

INSTRUCTIONS
1. Prepare general journal entries to:
a. Close the Income Summary account.
b. Close the partners’ drawing accounts.
2. Assume that there had been a net loss of $210,900 instead of net income of $380,000. Prepare the general journal entries to:
a. Close the Income Summary account.
b. Close the partners’ drawing accounts.

Analyze:

Justin Beavers’s capital account on January 1, 20X1, was $295,600. What is the balance in that account at the end of 20X1, assuming the profit for the year was $380,000?