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?
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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![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 yea
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 incurre
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 Compan
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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F39618134-6ceb-48ac-ab5a-e0c16873beed%2F42d04f0c-2a4e-4775-8a1c-46966fc692d8%2Fm6argzl_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 yea
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 incurre
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 Compan
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?
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