Revenues Less costs: Variable costs Fixed costs Selling & administrative Depreciation Operating income Loss on old elevator Net income LINK TO TEXT LINK TO VIDEO positive amounts and decreases as Using incremental analysis, determine if the old elevator should be replaced. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received negative amounts. Enter negative amounts using either a negative sign preceding the number e.g. -15 or parentheses e.g. (15).) negative amounts. In the third column, enter net income increases Net Income Retain Replace Old Elevator Increase Old Elevator (Decrease) Variable operating costs Fixed operating costs New elevator cost Salvage on old elevator Totals be replaced. The old elevator Open Show Work Click if you would like to Show Work for this question: 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 ride, and cost efficiency. Upon retuming 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 $104,000 $161,000 Estimated salvage value 5 years Estimated useful life 4 years Depreciation method Straight-line Straight-line Annual operating costs other than depreciation: Variable $35,200 $9,000 8,500 Fixed 22,300 Annual revenues are $240,000, 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 $25,500. Determine any gain or loss if the old elevator is replaced. LINK TO TEXT LINK TO VIDEO Prepare a 4-year summarized income statement for each of the following assumptions: (1) The old elevator is retained. Retain Old Elevator Revenues Less costs: Variable costs Fixed costs Selling & administrative Depreciation Net income (2) The old elevator is replaced. Replace Old Elevator