ACCOUNTING EXPERT TODAY

Anonymous
timer Asked: Feb 22nd, 2015

Question Description

On January 2.docx 

On January 2, 2013, Benson Hospital purchased a $99,972 special radiology scanner from Picard 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 $104,258. Approximately one year later, the hospital is approached by Dyno Technology salesperson, Meg Ryan, who indicated that purchasing the scanner in 2013 from Picard Inc. was a mistake. She points out that Dyno has a scanner that will save Benson Hospital $30,133 a year in operating expenses over its 3-year useful life. She notes that the new scanner will cost $110,364 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. Ryan agrees to buy the old scanner from Benson Hospital for $38,530. Retain Scanner Annual operating costs Net Income Increase (Decrease) Replace Scanner $ New scanner cost 110364 110364 Old scanner salvage 0 -38530 $ Total $ $ 0 38530 $ $

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