Toccoa Company owns equipment with a cost of $$600,000$ and accumulated depreciation of $$315,000$ that can be sold for $$250,000,$ less a $3\%$ sales commission. Alternatively, Toccoa Company can lease the equipment for four years for a total of $$310,000,$ at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Toccoa Company on the equipment would total $$42,000$ over the four$-$year lease.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

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Prepare a differential analysis on October $29$ as to whether Toccoa Company should lease $($Alternative $1)$ or sell $($Alternative $2)$ the equipment. Use a minus sign to indicate costs or negative differential effect on income.

Differential Analysis

Lease Equipment $($Alt$.1)$ or Sell Equipment $($Alt$.2)$

October $29$

Line Item Description Lease

Equipment

$($Alternative $1)$ Sell

Equipment

$($Alternative $2)$ Differential

Effect on

Income $($Alternative $2)$

Revenues $fill in the blank $2$

$310,000$

$fill in the blank $3$

$fill in the blank $4$

Costs fill in the blank $5$

$-42,000$

fill in the blank $6$

fill in the blank $7$

Profit $($Loss$)$ $fill in the blank $8$

$268,000$

$fill in the blank $9$

$242,500$

$fill in the blank $10$

$-25,500$

Should Toccoa Company lease $($Alternative $1)$ or sell $($Alternative $2)$ the equipment?