On July 1, 2020, Brandon SE purchased Mills Company by paying $130,000 cash. On July 1, 2020, the fair value of the net assets of Mills Company was as follows.

Buildings (net) (4 years remaining useful life) $30,000

Patent (4 years remaining useful life) 10,000

Land 25,000

Accounts receivable 12,000

Cash 50,000

Accounts payable 10,000

What are the effects of this combination transaction on Brandons statements on 31/12/2020?

		increases income for $13,000, and increases intangible assets by $10,000
		No effect on income, and increases intangible assets for $23,000
		No effect on income, and increases intangible assets for $15,000
		No effect on income, and increases intangible assets for $21,750