The effects of internal links pointing to 404s

Selected answers from the Dumb SEO Questions Facebook & G+ community.

• 
  Edwin Jonk: +Alistair Lattimore ;'s reply:
  " I'd always assumed that PR flowing into a robots.txt blocked URL was useless simply because Google can't crawl/index the blocked URL and therefore it was essentially squandered. It turns out that PR doesn't flow into URLs that Google hasn't previously crawled and are blocked by robots.txt - who knew! "
• 
  Richard Hearne: Dear +John Mueller ;
  
  I've been digging around a little into the effects of internal links pointing to 404s. I found your rather useful post from 2013 about 404s (https://plus.google.com/+JohnMueller/posts/RMjFPCSs5fm) but suspect the reference for that was crawl errors derived from malformed URIs etc.  ;I also found an old product forum post from +Gary Illyes ;where he mentioned "PageRank can only exist for live URLs that have a representation in Google's index and thus URLs that were dropped because they became an error, can't pass signals." (https://productforums.google.com/d/msg/webmasters/q-LqEpOfT1w/eLIeZXnmqooJ)
  
  But I cannot find anything regarding the links that point to 404s.
  
  So my question for you today, should you decide to answer: what happens to PageRank when a link points to a non-existent URL on the same domain?  ;Does the PR that link passes sink, or does Google ignore that link and remove it from the PageRank equation?
  
  Thanks in advance if you can help with my research John :)