Problem 10-7A The intangible assets section of Sappelt Company at December 31, 2017, is presented below. Patents ($70,000 cost less $7,000 amortization) $63,000 Franchises ($37,000 cost less $14,800 amortization) 22,200 Total $85,200 The patent was acquired in January 2017 and has a useful life of 10 years. The franchise was acquired in January 2014 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2018 Jan. 2 Paid $22,500 legal costs to successfully defend the patent against infringement by another company. Jan. Developed a new product, incurring $130,000 in research and development costs. A patent was granted June for the product on July 1. Its useful life is equal to its legal life. Sept. 1 Paid $45,000 to an extremely large defensive lineman to appear in commercials advertising the company's products. The commercials will air in September and October. Oct. 1 Acquired a franchise for $124,000. The franchise has a useful life of 50 years