12-06 (Part Level Submission) During 2018, Pharoah Company purchased a building site for its proposed research and development laboratury at a cost of $48,000. Canstruction of the building was started in 2018. The bulding was completed on December 31, 2019, at a cost of $460,000 and was placed in service on January 2, 2020. The estimated useful life of the building for depreciation purposes was 20 years. The straight-line method of depreciation was to be employed, and there was no estimated residual value. Management estimates that about 50% of the projects of the research and development group will result in long-term benefits (ie, at least 10 years] to the corporation. The remaining projects either benef the current period or are abandoned before completion. A summary of the number of projects and the direct costs incurred in conjunction with the research and development activities for 2020 appears below. Completed projects with long-term benefts Abandoned projects or projects that benefit the current period Projects in process-results indeterminate Total Number of Projects Salaries and Employee Benefits Other Expenses (excluding Building Depreciation Charges) $80,000 $57,000 4,000 42,000 $186,000 20,000 17,000 $94.000 10 " 36 Upon recommendation of the research and development group, Pharoah Company acquired a patant for manufacturing rights at a cost of $112,000. The petent was acquired on April 1, 2015, and has an economic life of 10 years If generally accepted accounting principles were followed, how would the stems above relating to research and development activities be reported on the following financial statements (3) The company's income statement for 2020. Pharoah Company Income Statement (Partial) LINE TO TEXT LINK EXT LINK TO TEXT