Buy vs. Lease Projec

You are a staff accountant at a higher education institution, Philly College of Business (“the College” or PCB). The lease on the current multifunction copiers the College uses is almost up. The college has decided to replace the current copiers with Canon imageRunnerAdvanceC55501 copiers. The CFO has asked you to investigate the impact to the financial statements over the next five years if the College buys the copiers for cash. The following is the information you have been able to gather so far. The copiers cost $10,190 each and the College will need 15 copiers. The local dealer is willing to offer credit terms of 3/15, net 45 on the purchase. The College usually takes advantage of such discounts. The copiers have an estimated useful life of five years and a projected salvage value of $1,000 each after five years. The College depreciates similar assets using the double declining balance method and nearest month. Based on its research, the College’s tech department estimates that repairs and maintenance on the new copiers will be minimal the first two years while they are under warranty and increase steadily over the remaining three years of their useful lives. They have provided you with the following estimates. R&M Cost Year (per copier) 2018 $100 2019 $150 2020 $300 2021 $400 2022 $500 Assignment Prepare a 1-page memo to the CFO summarizing the impact to the balance sheet and income statement in each of the next five years of a decision to buy 15 of the Canon imageRunnerAdvanceC55501 copiers as well as projected costs as outlined above. Note assume the College purchases the copiers on March 31, 2018 and pays for repairs and maintenance with cash. To support your analysis you should include the following as attachments or appendices to the memo: a. A table calculating depreciation expense over the life of the copiers. b. A table calculating repairs and maintenance expense over the next five years c. A schedule of the related journal entries in each of the five years d. A table summarizing the balance sheet and income statement impact in each of the five years