On January 2, 2021, Sandhill Hospital purchased a $92,000 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 Sandhill 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 Sandhill Hospital for $37,000.

(a)

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• Correct Answer

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Your answer is correct.

If Sandhill Hospital sells its old scanner on January 2, 2022, compute the gain or loss on the sale.

select an option Loss on saleGain on sale		$enter the gain or loss on the sale in dollars

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(b)

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Your answer is partially correct.

Prepare an incremental analysis of Sandhill 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).)

		Retain Scanner		Replace Scanner		Net Income Increase (Decrease)
Annual operating costs		$enter Annual operating costs in dollars		$enter Annual operating costs in dollars		$enter Annual operating costs in dollars
New scanner cost		enter New scanner cost in dollars		enter New scanner cost in dollars		enter New scanner cost in dollars
Old scanner salvage		enter Old scanner salvage in dollars		enter Old scanner salvage in dollars		enter Old scanner salvage in dollars
Total		$enter a total amount		$enter a total amount		$enter a total amount

Should Sandhill Hospital purchase the new scanner on January 2, 2022?