After closing the revenue and expense accounts, the profit for the year ended December 31, 2021 of the Mitt & Ryan partnership is $25,100. The partnership agreement specifies that profits and losses will be shared using the following formula.

1.

Allocate profit by a 5% interest allowance on the partners' beginning capital balances.

2.

Allocate salary allowances of $17,795 to Mitt and $12,595 to Ryan.

3.

Remaining profit (loss) is to be shared on a ratio of 8:5.

At the beginning of the year, Mitt's capital account had a balance of $30,500 and Ryan's capital account had a balance of $32,700. Mitt withdrew $1,070 cash per month while Ryan withdrew $1,270 per month from the partnership. During the year, Mitt made an additional investment of $5,200 cash into the partnership.