On January 2, 2021, Oriole Hospital purchased a $94,800 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 $106,000. 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 Oriole Hospital $26,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $111,000 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 Oriole Hospital for $40,500. (a) If Oriole Hospital sells its old scanner on January 2, 2022, compute the gain or loss on the sale. eTextbook and Media

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 2, 2021, Oriole Hospital purchased a $94,800 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 $106,000.
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 Oriole Hospital
$26,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $111,000 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 Oriole Hospital for $40,500.
(a)
If Oriole Hospital sells its old scanner on January 2, 2022, compute the gain or loss on the sale.
eTextbook and Media
Transcribed Image Text:On January 2, 2021, Oriole Hospital purchased a $94,800 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 $106,000. 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 Oriole Hospital $26,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $111,000 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 Oriole Hospital for $40,500. (a) If Oriole Hospital sells its old scanner on January 2, 2022, compute the gain or loss on the sale. eTextbook and Media
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