Intangibles: Balance Sheet Presentation and Income Statement Effects Binford Company has provided information on intangible assets as follows: 1. A patent was purchased from Lou Company for $1,860,000 on January 1, 2018. Binford estimated the remaining useful life of the patent to be 15 years. The patent was carried in Lou's accounting records at a net book value of $1,650,000 when Lou sold it to Binford. 2. During 2019, a franchise was purchased from Rink Company for $580,000. In addition, 6% of revenue from the franchise must be paid to Rink. Revenue from the franchise for 2019 was $2,100,000. Binford estimates the useful life of the franchise to be 5 years and takes a full year's amortization in the year of purchase. 3. Binford incurred R\&D costs in 2019 as follows: Binford estimates that these costs will be recouped by December 31,2020 . 4. On January 1, 2019, Binford estimates, based on new events, that the remaining life of the patent purchased on January 1 , 2018, is only 10 years from January 1, 2019. Binford Company Income Statement Effects For the Year Ended December 31, 2019 Patent from Lou Company: Amortization of patent for 2019 (Schedule 1) Franchise from Rink Company: Eranchise from Cash Research and Development Costs Total expenses Feedback