Kincaid Company owns a equipment with a cost of $366,100 and accumulated depreciation of $53,600 that...
Kincaid Company owns a equipment with a cost of $366,100 and accumulated depreciation of $53,600 that can be sold for $277,900, less a 3% sales commission. Alternatively, Kincaid Company can lease the equipment to another company for three years for a total of $284,600, 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 $15,600 over the three years.
Prepare a The area of accounting concerned with the effect of alternative courses of action on revenues and costs.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 | |||
| Lease Equipment (Alternative 1) |
Sell Equipment (Alternative 2) |
Differential Effect on Income (Alternative 2) |
|
| Revenues | $ | $ | $ |
| Costs | |||
| Income (Loss) | $ | $ | $ |
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Should Kincaid Company lease (Alternative 1) or sell (Alternative 2) the equipment?
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