Pharoah Company has provided information on intangible assets as follows. A patent was purchased from Shamrock Company for $1,700,000 on January 1, 2019. Pharoah estimated the remaining useful life of the patent to be 10 years. The patent was carried in Shamrocks accounting records at a net book value of $1,700,000 when Shamrock sold it to Pharoah. During 2020, a franchise was purchased from Flounder Company for $460,000. In addition, 5% of revenue from the franchise must be paid to Flounder. Revenue from the franchise for 2020 was $2,410,000. Pharoah estimates the useful life of the franchise to be 10 years and takes a full years amortization in the year of purchase. Pharoah incurred research and development costs in 2020 as follows. Materials and equipment $162,000 Personnel 184,000 Indirect costs 113,000 $459,000 Pharoah estimates that these costs will be recouped by December 31, 2023. The materials and equipment purchased have no alternative uses. On January 1, 2020, because of recent events in the field, Pharoah estimates that the remaining life of the patent purchased on January 1, 2019, is only 5 years from January 1, 2020.

Prepare the income statement effect (related to expenses) for the year ended December 31, 2020, as a result of the facts above.