Intangibles: Balance Sheet Presentation and Income Statement Effects Tamera Company has provided information on intangible assets as follows: A patent was purchased from Lou Company for $1,860,000 on January 1, Year 1. Tamera 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 $1,460,000 when Lou sold it to Tamera. During Year 2, a franchise was purchased from Rink Company for $300,000. In addition, 6% of revenue from the franchise must be paid to Rink. Revenue from the franchise for Year 2 was $2,100,000. Tamera estimates the useful life of the franchise to be 10 years and takes a full year's amortization in the year of purchase. Tamera incurred R&D costs in Year 2 as follows: Materials and equipment $112,000 Personnel 135,000 Indirect costs 59,000 $306,000 Tamera estimates that these costs will be recouped by December 31, Year 3. On January 1, Year 2, Tamera estimates, based on new events, that the remaining life of the patent purchased on January 1, Year 1, is only 10 years from January 1, Year 2.

Required:

Question Content Area

1. Prepare a schedule showing the intangibles section of Tamera's balance sheet at December 31, Year 2.