DE10-16 This exercise summarizes the accounting for patents, which like copyrights and trademarks, provide the owner with a special right. It also covers research and development. Questor Applications paid $875,000 to research and develop a new software program. Questor also paid $300,000 to acquire a patent on the new software. After readying the software for production, Questor's sales revenue for the first year totaled S 1,500,000. Cost of goods sold was 5200,000 and selling expenses were S400,000. All these transactions occurred during 20X3. Questor expects the patent to have a useful life of three years. 1. Prepare Questor Applications' income statement for the year ended December 31, 20X3, complete with a heading. 2. Considering the makeup of Questor's expenses, what should the company's outlook for future profits be on the new software program?