1. Burlington Construction Company is considering selling excess machinery with a book value of $281,400 (original cost of $401,400 less accumulated depreciation of $120,000) for $274,600, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $285,400 for five years, after which it is expected to have no residual value. During the period of the lease, Burlington Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $26,100.

   Question Content Area

   a. Prepare a differential analysis dated January 15 to determine whether Burlington Construction Company should lease (Alternative 1) or sell (Alternative 2) the machinery. If required, use a minus sign to indicate a loss.

   Differential Analysis Lease (Alt. 1) or Sell (Alt. 2) Machinery January 15

   	Lease Machinery (Alternative 1)	Sell Machinery (Alternative 2)	Differential Effects (Alternative 2)
   Revenues	$fill in the blank 29ee44f8e066fd4_1	$fill in the blank 29ee44f8e066fd4_2	$fill in the blank 29ee44f8e066fd4_3
   Costs	fill in the blank 29ee44f8e066fd4_4	fill in the blank 29ee44f8e066fd4_5	fill in the blank 29ee44f8e066fd4_6
   Profit (Loss)	$fill in the blank 29ee44f8e066fd4_7	$fill in the blank 29ee44f8e066fd4_8	$fill in the blank 29ee44f8e066fd4_9

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   b. On the basis of the data presented, would it be advisable to lease or sell the machinery?

   Lease the machinerySell the machinery