Intangibles: Balance Sheet Presentation and Income Statement Effects Valen Company has provided information on intangible assets as follows: 1. A patent was purchased from Lou Company for $1,575,000 on January 1, 2018. Valen 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 $1,235,000 when Lou sold it to Valen. 2. During 2019, a franchise was purchased from Rink Company for $330,000. In addition, 4% of revenue from the franchise must be paid to Rink. Revenue from the franchise for 2019 was $1,700,000. Valen estimates the useful life of the franchise to be 5 years and takes a full year's amortization in the year of purchase. 3. Valen incurred R&D costs in 2019 as follows: Materials and equipment Personnel Indirect costs $105,000 177,000 66,000 $348,000 Valen estimates that these costs will be recouped by December 31, 2020. 4. On January 1, 2019, Valen 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. Required: 1. Prepare a schedule showing the intangibles section of Valen's balance sheet at December 31, 2019. Valen Company Intangible Assets Section of Balance Sheet December 31, 2019 Patent, net (Schedule 1) 22,666.67 X