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Sandhill Company has provided information on intangible assets as follows. A patent was purchased from Teal Mountain Company for $1.600,000 on January 1, 2019. Sandhill
Sandhill Company has provided information on intangible assets as follows. A patent was purchased from Teal Mountain Company for $1.600,000 on January 1, 2019. Sandhill estimated the remaining useful life of the patent to be 10 years. The patent was carried in Teal Mountain's accounting records at a net book value of $1,600,000 when Teal Mountain sold it to Sandhill. During 2020, a franchise was purchased from Indigo Company for $450,000. In addition, 5% of revenue from the franchise must be paid to Indigo. Revenue from the franchise for 2020 was $2.530.000. Sandhill estimates the useful life of the franchise to be 10 years and takes a full year's amortization in the year of purchase. Sandhill incurred research and development costs in 2020 as follows. Materials and equipment Personnel Indirect costs $147,000 180,000 117,000 $444,000 Sandhill 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, Sandhill estimates that the remaining life of the patent purchased on January 1, 2019, is only 5 years from January 1, 2020. Prepare the intangibles section of Sandhill's balance sheet at December 31, 2020. (Enter account name only and do not provide descriptive information.) SANDHILL COMPANY Intangibles Section of Balance Sheet $ $ Prepare the income statement effect (related to expenses) for the year ended December 31, 2020, as a result of the facts above. (Enter account name only and do not provide descriptive information.) SANDHILL COMPANY Income Statement Effect $ $ e Textbook and Media List of Accounts
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