E12-18 (L01,2) (Classification Issues-Intangibles) Presented below is a list of items that could be included in the intan- gible assets section of the balance sheet 1. Cost of purchasing a patent from an inventor 2. Unrecovered costs of a successful legal suit to protect the patent. 3. Cost of purchasing a copyright. 4. Long-term receivables. 5. Cost of purchasing a trademark. 6. Cost of developing a trademark. 7. Research and development costs. 8. Cost of conceptual formulation of possible product alternatives. 9. Legal costs incurred in securing a patent 10. Cost of doveloping a patent 11. Timberland 12. Lease prepayment (6 months' rent paid in advance). 13. Cost of searching for applications of new research findings 14. Operating losses incurred in the start-up of a business, 15. Purchase cost of a franchise. 16. Goodwill generated internally 17. Goodwill acquired in the purchase of a business. 18. Cost of testing in search for product alternatives, 19. Training costs incurred in start-up of new operation. 20. Costs incurred in the formation of a corporation. 21. Cost of equipment obtained 22. Cost of engineering activity required to advance the design of a product to the manufacturing stage. 23. Investment in a subsidiary company. Instructions (a) Indicate which items on the list above would generally be reported as intangible assets in the balance sheet. (b) Indicate how, if at allthe items not reportable as intangible assets would be reported in the financial statements