Case E. Matson Company purchased the following on January 1, 2016: Office equipment at a cost of $42,000 with an estimated useful life to the company of three years and a residual value of $12,600. The company uses the double-declining-balance method of depreciation for the equipment. Factory equipment at an invoice price of $813,200 plus shipping costs of $23,000. The equipment has an estimated useful life of 113,000 hours and no residual value. The company uses the units-of-production method of depreciation for the equipment. A patent at a cost of $455,000 with an estimated useful life of 13 years. The company uses the straight-line method of amortization for intangible assets with no residual value. The company's year ends on December 31. 1-a. Prepare a partial depreciation schedule of office equipment for 2016, 2017, and 2018. (Do not round intermediate calculations.)

1-b. Prepare a partial depreciation schedule of factory equipment. The company used the equipment for 8,700 hours in 2016, 9,900 hours in 2017, and 9,600 hours in 2018

2. On January 1, 2019, Matson altered its corporate strategy dramatically. The company sold the factory equipment for $705,660 in cash. Prepare the entry related to the sale of the factory equipment.

. On January 1, 2019, when the company changed its corporate strategy, its patent had estimated future cash flows of $330,000 and a fair value of $306,000. What would the company report on the income statement (account and amount) regarding the patent on January 2, 2019?