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Current Attempt in Progress On January 2, 2021, Sunland Hospital purchased a $103,200 special radiology scanner from Bella Inc. The scanner had a useful life
Current Attempt in Progress On January 2, 2021, Sunland Hospital purchased a $103,200 special radiology scanner from Bella 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 $105,000. Approximately one year later, the hospital is approached by Dyno Technology salesperson, Jacob Cullen, who indicated that purchasing the scanner in 2021 from Bella Inc. was a mistake. He points out that Dyno has a scanner that will save Sunland Hospital $26,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $110,000 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 Sunland Hospital for $51,000. (a) Prepare an incremental analysis of Sunland 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).) Annual operating costs $ New scanner cost Old scanner salvage Total Retain Scanner 315000 $ $ 315000 $ Should Sunland Hospital purchase the new scanner on January 2, 2022? Replace Scanner 260000 110000 (51000) tA $ S Net Income Increase (Decrease) (110000) 51000
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