Olaf Motors Ltd. decides to create a new line of electric vehicles. The following transactions occurred during the year. Assume that all purchases were made in cash unless specified otherwise. - Purchased testing equipment that will be used for multiple R\&D projects for $350,000 on January 1st. The equipment has a five-year life. Olaf expects the equipment can be sold for $25,000 at the end of life. The equipment will be depreciated using the straight-line method. - Paid $134,000 in salaries and wages for testing activities. - Developed a prototype for a new battery. The prototype cost $230,000 to develop. - Obtained a patent for the new battery on July 1st. The patent application fee was $25,000. The useful life of the patent is 10 years. - Acquired Carrots Tech on September 1st for $300,000. An appraisal of Carrots at acquisition reports land with a fair value of $70,000 and R&D projects with a fair value of $230,000. A. How much R\&D expense does Olaf recognize for the year? B. What is the carrying value (book value) of the patent at the end of the year