Patent #1:

Acquired: January 1, 2017

Cost: $60,000

Life: Useful life 10 years

Legal life 20 years

The following transactions may affect intangible assets in 2018.

Jan. 1 Paid $12,000 in legal costs to successfully defend Patent #1 against infringement by another company. The life of the patent was increased by 3 years.

Jan. May Developed a new product, incurring $30,000 in research and development costs, $10,000 in legal fees, and $10,000 in application fees with the U.S. Patent Office. Patent #2 for this product was granted on July 1 and is expected to have a useful life of 5 years and a legal life of 20 years.

Compute the book value of Patent #2 on December 31, 2018:

A		$16,000
B		$18,000
C		$45,000
D		$27,000
E		$19,500