E12.10 (LO 1, 2, 4) (Accounting for Patents) Tones Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $30,600 Patent B $15,000 Patent C $14,400 3/1/16 7/1/17 9/1/18 17 years 10 years 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $245,700 were incurred during the year. 2. Patent D was purchased on July 1 for $36,480. This patent has a useful life of 9 years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may have occurred at December 31, 2020. The controller for Tones estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,000 2022 2,000 2023 2,000 Arema that the cash flows occur