RAMI has owned and operated a proprietorship for several years.

On January $1,2018,$ he decides to terminate this business and become a partner in the firm of ASMA and RAMI.

$$ RAMI$$s investment in the partnership consists of HK$$140,000$ in CASH, and the following assets of the proprietorship:

$$ ACCOUNTS RECEIVABLE HK$$130,000$ less allowance for doubtful accounts of HK$$20,000,$

$$ and EQUIPMENT HK$$200,000$ less accumulated depreciation of HK$$45,000.$

It is agreed that the allowance for doubtful accounts should be HK$$28,000$ for the partnership.

The fair value of the equipment is HK$$175,500.$

ASMA brings with her $$200,000$ Book value in CASH, $$280,000$ Fair value.

on Dec. $31,2018,$ the net income was $$100,000$ and the income ratios are RAMI $70\%,$ ASMA $30\%.$ Prepare the journal entry to record the division of the net income.

Instructions

Journalize RAMI$$s admission to the firm of ASMA and RAMI.