Intangibles: Balance Sheet Presentation and Income Statement Effects Comp-tech Company has provided information on intangible assets as follows: A patent was purchased from Lou Company for $1,305,000 on January 1, 2018. Comp-tech estimated the remaining useful life of the patent to be 10 years. The patent was carried in Lou's accounting records at a net book value of $945,000 when Lou sold it to Comp-tech. During 2019, a franchise was purchased from Rink Company for $570,000. In addition, 5% of revenue from the franchise must be paid to Rink. Revenue from the franchise for 2019 was $2,400,000. Comp-tech estimates the useful life of the franchise to be 5 years and takes a full year's amortization in the year of purchase. Comp-tech incurred R&D costs in 2019 as follows: Materials and equipment $143,000 Personnel 148,000 Indirect costs 78,000 $369,000 Comp-tech estimates that these costs will be recouped by December 31, 2020. On January 1, 2019, Comp-tech estimates, based on new events, that the remaining life of the patent purchased on January 1, 2018, is only 5 years from January 1, 2019. Required: Question Content Area 1. Prepare a schedule showing the intangibles section of Comp-tech's balance sheet at December 31, 2019. Comp-tech Company Intangible Assets Section of Balance Sheet December 31, 2019 Patent, net (Schedule 1) $fill in the blank 886cb602105dfb9_1 1,305,000 Franchise from Rink Company, net (Schedule 2) fill in the blank 886cb602105dfb9_2 945,000 Intangible assets $fill in the blank 886cb602105dfb9_3 Schedule 1: Computation of Patent from Lou Company Cost of patent at date of purchase $fill in the blank 886cb602105dfb9_4 Amortization of patent for 2018 fill in the blank 886cb602105dfb9_5 $fill in the blank 886cb602105dfb9_6 Amortization of patent for 2019 fill in the blank 886cb602105dfb9_7 Patent balance $fill in the blank 886cb602105dfb9_8 Schedule 2: Computation of Franchise from Rink Company Cost of franchise at date of purchase $fill in the blank 886cb602105dfb9_9 Amortization of franchise for 2019 fill in the blank 886cb602105dfb9_10 Franchise balance $fill in the blank 886cb602105dfb9_11 Question Content Area 2. Prepare a schedule showing the income statement effects for the year ended December 31, 2019, as a result of the previously mentioned facts. Comp-tech Company Income Statement Effects For the Year Ended December 31, 2019 Patent from Lou Company: Amortization of patent for 2019 (Schedule 1) $Amortization of patent for 2019 (Schedule 1) Franchise from Rink Company: Amortization of franchise for 2019 (Schedule 2) $Amortization of franchise for 2019 (Schedule 2) Payment to Rink Payment to Rink Payment to Rink Research and Development Costs Research and Development Costs Total expenses