Partner income and withdrawal journal entries
The notes to the annual report for KPMG LLP (U.K.) indicated the following policies regarding the partners' capital:
Assume that the partners draw £40 million per month for 2012 and the net income for the year is £600 million. Journalize the partner capital and partner drawing control accounts in the following requirements:
a. Provide the journal entry for the monthly partner drawing for January.
b. Provide the journal entry to close the income summary account at the end of the year.
c. Provide the journal entry to close the drawing account at the end of the year.
d. Why would partner drawings be considered "reclaimable" until profits have been allocated?