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?

Kincaid Company owns equipment with a cost of $364,100 and accumulated depreciation of $53,600 that can be sold for $273,400, less a 4% sales commission. Alternatively, Kincaid Company can lease the equipment for 3 years for a total of $287,600, 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 $14,900 over the 3-year lease. a. Prepare a differential analysis on October 29 as to whether Kincaid Company 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 Differential Line Item Description Equipment Equipment (Alternative 1) (Alternative 2) Effects (Alternative 2) < Revenues Costs 287,600 $ 273,400 $14,200 14,900 Profit (Loss) 272,700 X Feedback Check My Work Subtract the lease costs from the lease…

Blossom, Inc. leases a piece of equipment to Wildhorse Company on January 1, 2025. The contract stipulates a lease term of 5 years, with equal annual rental payments of $8,880 at the end of each year. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. The asset has a fair value of $48,000, a book value of $43,000, and a useful life of 8 years. At the end of the lease term, Blossom expects the residual value of the asset to be $12,000, and this amount is guaranteed by a third party. Assuming Blossom wants to earn a 5% return on the lease and collectibility of the lease payments is probable, record its journal entry at the commencement of the lease on January 1, 2025. (List all debit entries before credit entries. Credit account titles are automatically

Plymouth Company owns equipment with a cost of $600,000 and accumulated depreciation of $375,000 that can be sold for $300,000, less a 4% sales commission. Alternatively, Plymouth Company can lease the equipment for four years for a total of $320,000, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Plymouth Company on the equipment would total $40,000 over the four-year lease. a. Prepare a differential analysis on August 7 as to whether Plymouth Company should lease (Alternative 1) or sell (Alternative 2) the equipment. Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) August 7   LeaseEquipment(Alternative 1) SellEquipment (Alternative 2) DifferentialEffects (Alternative 2) Revenues $ $ $ Costs       Profit (Loss) $ $ $ b. Should Plymouth Company lease (Alternative 1) or sell (Alternative 2) the equipment?