At the beginning of last year (2021) Richter Condos installed a mechanized elevator for its tenants. The owner of the company, Anthony 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 company's accountant to provide him with cost data on the company's elevator. This information is presented below. New Elevator Old Elevator $96,000 $160,000 0 0 5 years 4 years Purchase price Estimated salvage value Estimated useful life Depreciation method Annual operating costs other than depreciation: Variable Fixed Straight-line Straight-line $34,800 $10,000 22,800 8,800 Annual revenues are $241,000, and selling and administrative expenses are $29.000, regardless of which elevator is used. If the old elevator is replaced now, at the beginning of 2022, Richter Condos will be able to sell it for $25,600 (a) Your answer is correct. Determine any gain or loss if the old elevator is replaced. Loss on sale $ 51200 e Textbook and Media Attempts: 2 of 5 used * Your answer is incorrect. Prepare a 4-year summarized income statement for each of the following assumptions: (1) The old elevator is retained. Retain Old Elevator Revenues $ 241,000 Less costs: Variable costs -34,800 Fixed costs 22,800 Selling & administrative 29.000 Depreciation Net income $ (2) The old elevator is replaced. Replace Old Elevator Revenues $ Less costs: Variable costs Fixed costs Selling & administrative DOT Depreciation Operating income Loss on old elevator Net income