Keating Co. is considering disposing of equipment with a cost of $71,000 and accumulated depreciation of $49,700.
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Keating Co. is considering disposing of equipment with a cost of $71,000 and accumulated depreciation of $49,700. Keating Co. can sell the equipment through a broker for $32,000 less a 7% commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $47,000. Keating will incur repair, insurance, and property tax expenses estimated at $9,000 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
A:$5,768
B:$8,240
C:$9,888
D:$12,360
Related Book For
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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