Please show work and equations using this format for parts A-D

P12-4 Last year (2016), Richter 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 $120,000 $160,000 Estimated salvage value Estimated useful life Depreciation method Annual operating costs other than depreciation Variable 0 0 5 years Straight-line 4 years Straight-line $ 35,000 23,000 $10,000 8,500 Fixed Annual revenues are $240,000, and selling and administrative expenses are regardless of which elevator is used. If the old elevator is replaced now, at the beginning of 2017, Richter Condos will be able to sell it for $25,000. $29,000, Instructions (a) Determine any gain or loss if the old elevator is replaced (b) Prepare a 4-year summarized income statement for each of the following assumptions: (1) The old elevator is retained. (2) The old elevator is replaced. (c) Using incremental analysis, determine if the old elevator should be replaced (d) ignored in the decision to replace the old elevator Write a memo to Ron Richter explaining why any gain or loss should be Refer to textbook instructions. Show work or include formulas within each cell (a) Cost Accumulated depreciation Book value Sales proceeds Loss on sale (b) (1) Retain Old Use both columns (debits/credits) Elevator Revenues Less costs Variable costs Fixed costs Selling & administrative Depreciation Net income (b) (2) Replace Old Elevator Revenues Less costs: Variable costs Fxed costs Selling & administrative Depreciation Operating income Less: Loss on old elevator Net income (c) Net Income Retain Old Replace Old Increase Elevator Eleyator (Decrease) Variable operating costs Fixed operating costs New elevator cost Salvage on old elevator Totals Part D is on next tab