Problem 23-04A a-C At the beginning of last year (2019), 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 $104,500 New Elevator $161,000 0 0 5 years 4 years Purchase price Estimated salvage value Estimated useful life Depreciation method Annual operating costs other than depreciation: Variable Straight-line Straight-line $35,600 23,200 $11,000 9,000 Fixed Annual revenues are $239,000, and selling and administrative expenses are $29,000, regardless of which elevator is used. If the old elevator is replaced now, at the beginning of 2020, Richter Condos will be able to sell it for $24,700. Your answer is correct. Determine any gain or loss if the old elevator is replaced. Loss on sale v 58900 $ SHOW SOLUTION LINK TO TEXT Prepare a 4-year summarized income statement for each of the following assumptions: (1) The old elevator is retained. Retain Old Elevator Revenues 956000 Less costs: Variable costs 142400 > Fixed costs 92800 Selling & administrative 116000 > Depreciation 83600 434800 Net income 521200 $ (2) The old elevator is replaced. Replace Old Elevator Revenues 956000 Less costs: Variable costs 44000 Fixed costs 36000 Selling & administrative 116000 X Depreciation 161000 (415900) X Operating income (415900) Loss on old elevator 58900 Net income 540100