Reference no: EM132763451
Questions -
Q1. Enumerate the differences between Amortization and Depreciation
Pearl Company Ltd acquires land for $77,000 cash. Additional costs are as follows.
Removal of shed $300
Filling and grading $1,500
Salvage value of lumber of shed $120
Broker commission $1,130
Paving of parking lot $10,000
Closing costs $560
Required - What is the cost of the land that Pearl Company will record?
Q2. SAM Company Ltd purchased equipment in 2010 for $104,000 with an estimated salvage value of $8,000 and a 10-year useful life. At December 31, 2016, there was $67,200 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2017, the equipment was sold for $21,000.
Required - Prepare the appropriate journal entries to remove the equipment from the books of SAM Company Ltd on March 31, 2017?