Question

Canillon company is considering the disposal of equipment thatis no longer needed for operations. The equipment originally cost$600,000 and accumulated depreciatiomn to date totals $ 460,000. Anoffer has been received to lease the machine for its remaininguseful life for a total of $290,000, after which the equipment willhave no salvage value, and property tax expenses during the periodof the lease are estimated at $75,000. Alternatively, the equipmentcan be sold through a broker for $230,000 less a 10%commission.

How to prepare a differential analysis report, dated June 15 ofthe current year, on whether the equipment hould be lesased orsold