please help Problem 21-4A (Part Level Submission) Last year 2016 c er ondus ins
ID: 2431855 • Letter: P
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Problem 21-4A (Part Level Submission) Last year 2016 c er ondus ins al ed u mecr er 12eu e e atur or its enam The w ner g the cumpany on Richter recently returned rom dn indus ry equipmen exhibition where he wa c ed u computerized elevator demonstrated. He wus irmpressed he elevator's speed, comfort of ride, and cost efficiency. Upo 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 compariy's accountant to pruvide him with cest data on the company's elevater. This inforrmation is presented below. New Elevator Old Elevator $104,000 Purchase price Estimated salvage value Estimated useful ife Dapreciatian method Annual operating costs S years 4 years Straigha-line Straight line other than depreciatian: 34,400 22,300 $11,000 6,800 Fixed Annual revenues are 240,000 end selling and adminstrative expenses are s2 000 regardless of which elevator s used. If the old e evato s replaced now et the beginning of 2017 Richter Condos will be able to sell it for $24 300 Your answer is correct Determine any gain or loss if the old elevator is replacad. Yate an sale! 900 Attempts: 1 of 3 used Prepare e 4-year summarized income statement for each of the following assumpions (1) The old elevator is retained Retain Old Elevator Revenues Less costs: Variable costs Fixed costs Selling & administrative Net income (2) The old elavator is roplaced Replace Old Elevator Less costs: Fixed costs Selling & administrative Depreciation Opcrating incoma Less: Loss un od elevator Net incorne Attempts: 0 of 3 usedExplanation / Answer
(b)(1)
(b)(2)
Retain Old Elevator Revenues ($240000 x 4) 960000 Less costs: Variable costs ($34400 x 4) 137600 Fixed costs ($22800 x 4) 91200 Selling & administrative ($28000 x 4) 112000 Depreciation ($104000 x 4/5) 83200 424000 Net income 536000Related Questions
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