Assume that Darrow Co. is considering disposing of equipment that cost P50,000 and has P40,000...
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Accounting
Assume that Darrow Co. is considering disposing of equipment that cost P50,000 and has P40,000 of accumulated depreciation to date. Darrow Co. can sell the equipment through a broker for P25,000 less 5% commission. Alternatively, Minton Co. has offered to lease the equipment for five years for a total of P48,750. Darrow will incur repair, insurance, and property tax expenses estimated at P10,000. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is:
a. P25,000
b. P12,500
c. P5,000
d. P15,000
-Solution is required
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