This exercise summarizes the accounting for patents and for research and development.

During 2008, Digital Cable Company paid \(\$ 50,000\) to research and develop a new technology, and also purchased a patent for \(\$ 10,000\). Digital's service revenue for 2008 totaled \(\$ 700,000\), and selling expenses were \(\$ 400,000\). Digital expects the patent to have a useful life of five years. Prepare Digital Cable Company's income statement for the year ended December 31, 2008, complete with a heading.