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a. Prepare a differential analysis report for the lease or sell decision. INMAN INDUSTRIES Proposal to Lease or Sell Machinery Differential Analysis Report Differential revenue from alternatives: Revenue from lease Proceeds from sale Differential revenue from lease Differential cost of alternatives: Repairs, insurance, and property tax expenses from lease Commission on sale Differential cost of lease Net differential gain from lease alternative 100 3

a. Prepare a differential analysis report for the lease or sell decision. INMAN INDUSTRIES Proposal to Lease or Sell Machinery Differential Analysis Report Differential revenue from alternatives: Revenue from lease Proceeds from sale Differential revenue from lease Differential cost of alternatives: Repairs, insurance, and property tax expenses from lease Commission on sale Differential cost of lease Net differential gain from lease alternative 100 3

FINANCIAL ACCOUNTING
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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< Lease or Sell Decision Inman Industries is considering selling excess machinery with a book value of $278,900 (original cost of $399,200 less accumulated depreciation of $120,300) for $274,800 less a 6% brokerage commission. Alternatively, the machinery can be leased for a total of $283,400 for five years, after which it is expected to have no residual value. During the period of the lease, Inman Industries' costs of repairs, insurance, and property tax expenses are expected to be $24,500. a. Prepare a differential analysis report for the lease or sell decision. INMAN INDUSTRIES Proposal to Lease or Sell Machinery Differential Analysis Report Differential revenue from alternatives: Revenue from lease Proceeds from sale Differential revenue from lease Differential cost of alternatives: Repairs, insurance, and property tax expenses from lease Commission on sale Differential cost of lease Net differential gain from lease alternative Feedback 100 0 CO D....18 jpe 1000_F_2 3 EDG5... peg
Transcribed Image Text:< Lease or Sell Decision Inman Industries is considering selling excess machinery with a book value of $278,900 (original cost of $399,200 less accumulated depreciation of $120,300) for $274,800 less a 6% brokerage commission. Alternatively, the machinery can be leased for a total of $283,400 for five years, after which it is expected to have no residual value. During the period of the lease, Inman Industries' costs of repairs, insurance, and property tax expenses are expected to be $24,500. a. Prepare a differential analysis report for the lease or sell decision. INMAN INDUSTRIES Proposal to Lease or Sell Machinery Differential Analysis Report Differential revenue from alternatives: Revenue from lease Proceeds from sale Differential revenue from lease Differential cost of alternatives: Repairs, insurance, and property tax expenses from lease Commission on sale Differential cost of lease Net differential gain from lease alternative Feedback 100 0 CO D....18 jpe 1000_F_2 3 EDG5... peg
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