On 1st of January 2021, the company GET INSURED, Ltd

Subject:BusinessPrice: Bought3

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On 1st of January 2021, the company GET INSURED, Ltd. purchased a license for computer software to improve the management of the client portfolio.

The price of the license is $50,000 and its useful life 5 years

The same day, the company sells a vehicle of its fleet for $38,000. The company had purchased it on January 1st, 2019 for $96,000. The car had an estimated useful life of 5 years and an estimated salvage value of $6,000 at the date of the purchase.

1. Prepare a complete amortization schedule for the license of the software using the straight line method (20 points)
2. Prepare a complete depreciation schedule of the vehicle using the straight line method (20 points)
3. Prepare a complete depreciation schedule of the vehicle using the double declining balance method (20 points)
4. Record the journal entries for the sale of the vehicle taking into account that the company used the straight line method for depreciation purposes (15 points)
5. Record the journal entries for the sale of the vehicle taking into account that the company used the double declining balance method for depreciation purposes (15 points)
6. Explain the differences between the results of question 4 and 5. (10 points)