Toccoa Company owns equipment with a cost of $600,000 and accumulated depreciation of $400,000 that can be sold for $330,000, less a 5% sales commission. Alternatively, Toccoa Company can lease the equipment for four years for a total of $300,000, 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 $35,000 over the four-year lease.

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.

Line Item Description	Lease Equipment (Alternative 1)	Sell Equipment (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues	$fill in the blank 2	$fill in the blank 3	$fill in the blank 4
Costs	fill in the blank 5	fill in the blank 6	fill in the blank 7
Profit (Loss)	$fill in the blank 8	$fill in the blank 9	$fill in the blank 10

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

Lease the equipment/Sell the equipment