Last year (2016), Riverbed Condos installed a mechanized elevator for its tenants. The owner of the company, Ron 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 companys accountant to provide him with cost data on the companys elevator. This information is presented below.

I only need answers to the ones in RED.

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I only need answers to the ones in RED that are incorrect!

Problem 12-4 (Part Level Submission Last year (2016), Riverbed Condos installed a mechanized elevator for its tenants. The owner of the company, Ron 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. Old Elevator New Elevator Purchase price $160,000 $100,000 Estimated salvage value 0 0 5 years Estimated useful life 4 years Straight-line Straight-line Depreciation method Annual operating costs other than depreciation: Variable $34,700 $9,000 Fixed 24,000 8,100 Annual revenues are $241,000, and selling and administrative expenses are $28,000, regardless of which elevator is used. If the old elevator is replaced now, at the beginning of 2017, Riverbed 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. 54,400 Loss on sale (b) Your answer is correct. Prepare a 4-year summarized income statement for each of the following assumptions: (1) The old elevator is retained. Retain Old Elevator 964,000 Revenues Less costs: 138,800 Variable costs 96,000 Fixed costs Selling & administrative 112,000 Depreciation 80,000 426,800 537,200 Net income (2) The old elevator is replaced Replace Old Elevator 964,000 Revenues Less costs: 36,000 Variable costs Fixed costs 32,400 Selling & administrative 112,000 Depreciation 160,000 340,400 623,600 Operating income Less: Loss on old elevator 54,400 569,200 Net income (c) Your answer partially correct. Try again. Using incremental analysis, determine if the old elevator should be replaced. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Retain Replace Old Elevator Increase Old Elevator (Decrease) 138,800 Variable operating costs 36,000 102,800 Fixed operating costs 96,000 32,400 63,600 537,200 569,200 New elevator cost 32,000 Salvage on old elevator 80,000 160,000 159,200 397,200 357,600 232,000 Totals