On January $2,2021,$ Splish Hospital purchased a $$95,500$ special radiology scanner from Golden 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 $$105,000.$

Approximately one year later, the hospital is approached by Sweet Acacia Technology salesperson Carol Garcia, who indicates that

purchasing the scanner in $2021$ from Golden was a mistake. She points out that Sweet Acacia has a scanner that will save Splish

Hospital $$25,400$ a year in operating expenses over its four$-$year useful life. She notes that the new scanner will cost $$120,800$ 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. Sweet Acacia agrees to buy the old scanner from Splish Hospital for $$63,400.$

$($a$)$

Assume Splish Hospital sells its old scanner on January $2,2022.$ Calculate the gain or loss on the sale.

If Splish Hospital sells its old scanner it incurs a

of $