Last year (2016), Bramble Condos installed a mechanized elevator for its tenants. The owner of the company, Ron Richter, recently returned from an industry equipment exhibition where he watched a computerized elevator demonstrated. He was impressed with the elevator's speed, comfort of ride, and cost efficiency. Upon returning from the exhibition, he asked his purchasing agent to collect price and operating cost data on the new elevator. In addition, he asked the companys accountant to provide him with cost data on the companys elevator. This information is presented below.

Annual revenues are $241,000, and selling and administrative expenses are $28,000, regardless of which elevator is used. If the old elevator is replaced now, at the beginning of 2017, Bramble Condos will be able to sell it for $25,200.

Old Elevator $102,000 0 5 years Straight-line New Elevator $160,000 0 4 years Straight-line Purchase price Estimated salvage value Estimated useful life Depreciation method Annual operating costs other than depreciation: Variable Fixed $34,300 23,500 $9,000 8,600 x your answer is incorrect. Try again. Determine any gain or loss if the old elevator is replaced. LINK TO TEXT x Your answer is incorrect. Try again. Prepare a 4-year summarized income statement for each of the following assumptions: (1) The old elevator is retained. Retain Old Elevator Revenues Less costs: Variable costs Fixed costs Selling & administrative Depreciation Net income (2) The old elevator is replaced. Replace Old Elevator 960000 Revenues Less costs: Variable costs 140000 Fixed costs 92000 Selling & administrative 116000 Depreciation 96000 Operating income Less: Loss on old elevator Net income your answer is partially correct. Try again. sing incremental analysis, determine if the old elevator should be replaced. (Enter negative amounts using either a negative sign preceding the number e.g. -45 r parentheses e.g. (45).) Net Income Retain Replace Increase Old Elevator Old Elevator (Decrease) Variable operating costs 40000 -10000 140000 Fixed operating costs 92000 34000 -58000 x New elevator cost 160000 - 160000 Salvage on old elevator -25000 -25000 Totals 232000 209000 -23000 LINK TO TEXT