P12-6 IL02,4,5) (Accounting for R&D Costs) During 2015, Wright Tool Company purchased a building site for i posed research and development laboratory at a cost of $60,000 Construction of the building was started in 2015. The b was completed on December 31, 2016, at a cost of $320,000 and was placed in service on January 2, 2017. The estimated there was no estimated residual value. h hilding for degneciation purpones was 20 years The sraight-line method of depreciation was tobe ml Management estimates that about 50% of the projects of the research and development group will result in ie, at least 10 years) to the corporation. The remaining projects either benefit the current period or are abundoned befor Bon. A summary of the number of projects and the direct costs incurred in conjunction with the research and development tivities for 2017 appears below I g-term b Salaries and Other Expenses Number Employee(excluding Building Completel projects with ling Abandoned projts or proects hat 10 5,000 15.000 Total 77000 Concepts for Analysis 647 Upon recommendation of the research and development group, Wright Tool Company acquired a patent for marnufacturing ighes at a cost of $88,000. The patent was acquired on April 1, 2016, and has an economic life of 10 years Instructions gmerally accepted accounting principles were followed, how would the items above relating to research and development ac- tivites be reported on the following financial statements? a) The company's income statement for 2017 b) The company's balance sheet as of December 31, 2017 sure to give account titles and amounts, and briefly justify your presentation. CMA adapted)