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On January 2, 2021, Iwilight Hospital purchased a $99, 600 special radiology scanner from Oriole Inc. The scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life. The straight- line method of depreciation is used on this scanner. Annual operating costs with this scanner are $104, 000. Approximately one year later, the hospital is approached by Dyno Technology salesperson, Jacob Cullen, who indicated that purchasing the scanner in 2021 from Oriole Inc. was a mistake. He points out that Dyno has a scanner that will save Twilight Hospital $25,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $111,000 and has the same capabilities as the scanner purchased last year. The hospital agrees that both scanners are of equal quality. The new scanner will have no disposal value. Jacob agrees to buy the old scanner from Twilight Hospital for $49,500. (a) Prepare an incremental analysis of Twilight Hospital. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number e. g. 45 or parentheses e.g. (45).) \table[[Operating -

On January 2, 2021, Iwilight Hospital purchased a $99, 600 special radiology scanner from Oriole Inc. The scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life. The straight- line method of depreciation is used on this scanner. Annual operating costs with this scanner are $104, 000. Approximately one year later, the hospital is approached by Dyno Technology salesperson, Jacob Cullen, who indicated that purchasing the scanner in 2021 from Oriole Inc. was a mistake. He points out that Dyno has a scanner that will save Twilight Hospital $25,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $111,000 and has the same capabilities as the scanner purchased last year. The hospital agrees that both scanners are of equal quality. The new scanner will have no disposal value. Jacob agrees to buy the old scanner from Twilight Hospital for $49,500. (a) Prepare an incremental analysis of Twilight Hospital. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number e. g. 45 or parentheses e.g. (45).) \table[[Operating -

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 2, 2021, Iwilight Hospital purchased a $99, 600 special radiology scanner from Oriole Inc. The scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life. The straight- line method of depreciation is used on this scanner. Annual operating costs with this scanner are $104, 000. Approximately one year later, the hospital is approached by Dyno Technology salesperson, Jacob Cullen, who indicated that purchasing the scanner in 2021 from Oriole Inc. was a mistake. He points out that Dyno has a scanner that will save Twilight Hospital $25,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $111,000 and has the same capabilities as the scanner purchased last year. The hospital agrees that both scanners are of equal quality. The new scanner will have no disposal value. Jacob agrees to buy the old scanner from Twilight Hospital for $49,500. (a) Prepare an incremental analysis of Twilight Hospital. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) \table[[Operating
Transcribed Image Text:On January 2, 2021, Iwilight Hospital purchased a $99, 600 special radiology scanner from Oriole Inc. The scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life. The straight- line method of depreciation is used on this scanner. Annual operating costs with this scanner are $104, 000. Approximately one year later, the hospital is approached by Dyno Technology salesperson, Jacob Cullen, who indicated that purchasing the scanner in 2021 from Oriole Inc. was a mistake. He points out that Dyno has a scanner that will save Twilight Hospital $25,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $111,000 and has the same capabilities as the scanner purchased last year. The hospital agrees that both scanners are of equal quality. The new scanner will have no disposal value. Jacob agrees to buy the old scanner from Twilight Hospital for $49,500. (a) Prepare an incremental analysis of Twilight Hospital. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) \table[[Operating
Prepare an incremental analysis of Twilight Hospital. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Operating costs New scanner cost Old scanner salvage Total $ $ Retain Scanner 312.000 i 0 0 312,000 i $ LA $ Should Twilight Hospital purchase the new scanner on January 2, 2020? Replace Scanner 79,000 111,000 i -49.500 i $ Net Income Increase (Decrease) 74,700 -111,000 49,500 13.200
Transcribed Image Text:Prepare an incremental analysis of Twilight Hospital. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Operating costs New scanner cost Old scanner salvage Total $ $ Retain Scanner 312.000 i 0 0 312,000 i $ LA $ Should Twilight Hospital purchase the new scanner on January 2, 2020? Replace Scanner 79,000 111,000 i -49.500 i $ Net Income Increase (Decrease) 74,700 -111,000 49,500 13.200
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