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Keating Co. is considering disposing of equipment with a cost of $58,000 and accumulated depreciation of $40,600. Keating Co. can sell the equipment through a broker for $26,000 less 10% commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $46,000. Keating will incur repair, insurance, and property tax expenses estimated at $8,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is $10,220 $14,600 $21,900 $17,520

Keating Co. is considering disposing of equipment with a cost of $58,000 and accumulated depreciation of $40,600. Keating Co. can sell the equipment through a broker for $26,000 less 10% commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $46,000. Keating will incur repair, insurance, and property tax expenses estimated at $8,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is $10,220 $14,600 $21,900 $17,520

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Keating Co. is considering disposing of equipment with a cost of $58,000 and accumulated depreciation of $40,600. Keating Co. can sell the equipment through a broker for $26,000 less 10% commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $46,000. Keating will incur repair, insurance, and property tax expenses estimated at $8,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is

$10,220
$14,600
$21,900
$17,520
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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