Lease or Sell Kincaid Company owns a equipment with a cost of $366,900 and accumulated depreciation of $56,000 that can be sold for $274,700, less a 4% sales commission. Alternatively, Kincaid Company can lease the equipment to another company for three years for a total of $287,000, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Kincaid Company on the equipment would total $15,200 over the three years. Prepare a differential analysis on March 23 as to whether Kincaid Company should lease (Alternative 1) or sell (Alternative 2) the equipment. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) March 23 Differential Effect on Income (Alternative 2) Lease Equipment (Alternative 1) Sell Equipment (Alternative 2) Revenues Costs $1 Lease the equipment Sell the equipment ny lease (Alternative 1) or sell (Alternative 2) the equipment?
Lease or Sell Kincaid Company owns a equipment with a cost of $366,900 and accumulated depreciation of $56,000 that can be sold for $274,700, less a 4% sales commission. Alternatively, Kincaid Company can lease the equipment to another company for three years for a total of $287,000, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Kincaid Company on the equipment would total $15,200 over the three years. Prepare a differential analysis on March 23 as to whether Kincaid Company should lease (Alternative 1) or sell (Alternative 2) the equipment. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) March 23 Differential Effect on Income (Alternative 2) Lease Equipment (Alternative 1) Sell Equipment (Alternative 2) Revenues Costs $1 Lease the equipment Sell the equipment ny lease (Alternative 1) or sell (Alternative 2) the equipment?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 1BE: Lease or sell Plymouth Company owns equipment with a cost of 600,000 and accumulated depreciation of...
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