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Using incremental analysis, determine whether Wildhorse Hospital should purchase the new scanner on January 2, 2022. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Operating cost New scanner cost Old scanner salvage Total $ LA $ Retain Scanner $ tA $ Replace Scanner $ $ LA Net Income Increase (Decrease)

Using incremental analysis, determine whether Wildhorse Hospital should purchase the new scanner on January 2, 2022. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Operating cost New scanner cost Old scanner salvage Total $ LA $ Retain Scanner $ tA $ Replace Scanner $ $ LA Net Income Increase (Decrease)

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, Wildhorse Hospital purchased a $104,000 special radiology scanner from Penny Worth Inc. The scanner has a useful life of five years and will 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 $105,200. Approximately one year later, the hospital is approached by Kingbird Technology salesperson Nancy Jackson, who indicates that purchasing the scanner in 2021 from Penny Worth was a mistake. She points out that Kingbird has a scanner that will save Wildhorse Hospital $27,000 a year in operating expenses over its four-year useful life. She notes that the new scanner will cost $119,000 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. Kingbird agrees to buy the old scanner from Wildhorse Hospital for $55,200. Assume Wildhorse Hospital sells its old scanner on January 2, 2022. Calculate the gain or loss on the sale. If Wildhorse Hospital sells its old scanner it incurs a eTextbook and Media Using incremental analysis, determine whether Wildhorse Hospital should purchase the new scanner on January 2, 2022. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Operating cost New scanner cost Old scanner salvage Total Wildhorse Hospital $ $ Retain Scanner $ of $ $ Replace Scanner V purchase the new scanner. $ Net Income Increase (Decrease)
Transcribed Image Text:On January 2, 2021, Wildhorse Hospital purchased a $104,000 special radiology scanner from Penny Worth Inc. The scanner has a useful life of five years and will 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 $105,200. Approximately one year later, the hospital is approached by Kingbird Technology salesperson Nancy Jackson, who indicates that purchasing the scanner in 2021 from Penny Worth was a mistake. She points out that Kingbird has a scanner that will save Wildhorse Hospital $27,000 a year in operating expenses over its four-year useful life. She notes that the new scanner will cost $119,000 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. Kingbird agrees to buy the old scanner from Wildhorse Hospital for $55,200. Assume Wildhorse Hospital sells its old scanner on January 2, 2022. Calculate the gain or loss on the sale. If Wildhorse Hospital sells its old scanner it incurs a eTextbook and Media Using incremental analysis, determine whether Wildhorse Hospital should purchase the new scanner on January 2, 2022. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Operating cost New scanner cost Old scanner salvage Total Wildhorse Hospital $ $ Retain Scanner $ of $ $ Replace Scanner V purchase the new scanner. $ Net Income Increase (Decrease)
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