Lease or Sell Casper Company owns equipment with a cost of $362,600 and accumulated depreciation of $54,600 that can be sold for $274,600, less a 4% sales commission. Alternatively, Casper Company can lease the equipment for 3 ye for a total of $286,500, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incur by Casper Company on the equipment would total $16,700 over the 3-year lease. a. Prepare a differential analysis on October 29 as to whether Casper Compa should lease (Alternative 1) or sell (Alternative 2) the equipment. If required use a minus sign to indicate a loss. Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) October 29 Lease Sell Line Item Description Equipment Equipment Revenues Costs Profit (Loss) Differential Effects (Alternative 1) (Alternative 2) (Alternative 2) Accounting numeric field b. Should Casper Company lease (Alternative 1) or sell (Alternative 2) the equipment?

Lease or Sell Casper Company owns equipment with a cost of $362,600 and accumulated depreciation of $54,600 that can be sold for $274,600, less a 4% sales commission. Alternatively, Casper Company can lease the equipment for 3 ye for a total of $286,500, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incur by Casper Company on the equipment would total $16,700 over the 3-year lease. a. Prepare a differential analysis on October 29 as to whether Casper Compa should lease (Alternative 1) or sell (Alternative 2) the equipment. If required use a minus sign to indicate a loss. Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) October 29 Lease Sell Line Item Description Equipment Equipment Revenues Costs Profit (Loss) Differential Effects (Alternative 1) (Alternative 2) (Alternative 2) Accounting numeric field b. Should Casper Company lease (Alternative 1) or sell (Alternative 2) the equipment?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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