On January 1, 2018, the general ledger of Parts Unlimited includes the following account balances:

Accounts	Debit			Credit
Cash	$	169,400
Accounts Receivable		19,400
Inventory		44,800
Land		347,000
Equipment		362,500
Accumulated depreciation				$	179,000
Accounts Payable					21,800
Common stock					527,000
Retained Earnings					215,300
Totals	$	943,100		$	943,100

From January 1 to December 31, the following summary transactions occur: Purchased inventory on account, $332,800.

Sold inventory on account, $593,200. The inventory cost $349,600.

Received cash from customers on account, $565,700.

Paid cash on account, $335,500.

Paid cash for salaries, $101,700, and for utilities, $59,700.

In addition, Parts Unlimited had the following transactions during the year:

April		1		Purchased equipment for $102,000 using a note payable, due in 12 months plus 8% interest. The company also paid cash of $3,900 for freight and $4,500 for installation and testing of the equipment. The equipment has an estimated residual value of $12,400 and a ten-year service life.
June		30		Purchased a patent for $47,000 from a third-party marketing company related to the packaging of the companys products. The patent has a 20-year useful life, after which it is expected to have no value.
October		1		Sold equipment for $37,900. The equipment cost $67,700 and had accumulated depreciation of $44,400 at the beginning of the year. Additional depreciation for 2018 up to the point of the sale is $9,200.
November		15		Several older pieces of equipment were improved by replacing major components at a cost of $61,100. These improvements are expected to enhance the equipments operating capabilities. [Record this transaction using Alternative 2 capitalization of new cost.]

Year-end adjusting entries:

Depreciation on the equipment purchased on April 1, 2018, calculated using the straight-line method.

Depreciation on the remaining equipment, $28,500.

Amortization of the patent purchased on June 30, 2018, using the straight-line method.

Accrued interest payable on the note payable.

Equipment with an original cost of $73,100 had the following related information at the end of the year: accumulated depreciation of $45,900, expected cash flows of $22,700, and a fair value of $14,300.

Accrued income taxes at the end of the year are $19,600.

1. Suppose the equipment purchased on April 1, 2018, had been depreciated using the units of depreciation method and was determined to be $14,700. Income and total assets in 2018 would have been lower by how much?

2. The costs of internally developed patents are recorded as R&D expense in the period incurred. The cost of an externally purchased patent is capitalized and then amortized over the remaining life of the patent. The difference for 2018 is calculated as what?