Exercise 12-8 (Part Level Submission) Cullumber Company has provided information on intangible assets as follows. A patent was purchased from Ford Company for $2,501,000 on January 1, 2016. Cullumber estimated the remaining useful life of the patent to be 10 years. The patent was carried in Ford's accounting records at a net book value of $1,968,000 when Ford sold it to Cullumber. During 2017, a franchise was purchased from Polo Company for $505,000. In addition, 7% of revenue frotn the franchise must be paid to Polo. Revenue from the franchise for 2017 was $2,456,000. Cullumber estimates the useful life of the franchise to be 10 years and takes a full year's amortization in the year of purchase. Cullumber incurred research and development costs in 2017 as follows Materials and equipment $139,600 193,600 102,800 $436,000 Personnel Indirect costs Cullumber estimates that these costs will be recouped by December 31, 2020, The materials and equipment purchased have no alternative uses. On January 1, 2017, because of recent events in the field, Cullumber estimates that the remaining life of the patent purchased on January 1, 2016, is only 5 years from January 1, 2017