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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 Mountains 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 years amortization in the year of purchase. Sandhill incurred research and development costs in 2020 as follows.

Materials and equipment

$147,000

Personnel

180,000

Indirect costs

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 Sandhills balance sheet at December 31, 2020. (Enter account name only and do not provide descriptive information.)

SANDHILL COMPANY Intangibles Section of Balance Sheet choose the accounting period December 31, 2020For the Year Ended December 31, 2020For the Month Ended December 31, 2020

select an opening section name Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity

enter a balance sheet item

$enter a dollar amount

enter a balance sheet item

enter a dollar amount

select a closing section name Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity

$enter a total amount for this section

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 choose the accounting period December 31, 2020For the Year Ended December 31, 2020For the Month Ended December 31, 2020

select an opening name for section one Amortization of patentFranchise from Indigo CompanyResearch and development costsTotal charged against incomePayment to Indigo CompanyPatent from Teal Mountain CompanyAmortization of franchise:

select an item Total charged against incomeResearch and development costsPatent from Teal Mountain CompanyAmortization of patentFranchise from Indigo CompanyAmortization of franchisePayment to Indigo Company

$enter a dollar amount

select an opening name for section two Patent from Teal Mountain CompanyAmortization of franchiseResearch and development costsFranchise from Indigo CompanyPayment to Indigo CompanyTotal charged against incomeAmortization of patent:

select an item Total charged against incomeAmortization of franchisePayment to Indigo CompanyResearch and development costsPatent from Teal Mountain CompanyAmortization of patentFranchise from Indigo Company

$enter a dollar amount

select an item Total charged against incomeAmortization of patentPayment to Indigo CompanyResearch and development costsPatent from Teal Mountain CompanyFranchise from Indigo CompanyAmortization of franchise

enter a dollar amount

enter a subtotal of the two previous amounts

select an item Amortization of patentResearch and development costsAmortization of franchisePatent from Teal Mountain CompanyPayment to Indigo CompanyFranchise from Indigo CompanyTotal charged against income

enter a dollar amount

select a closing name Research and development costsAmortization of franchiseFranchise from Indigo CompanyPatent from Teal Mountain CompanyTotal charged against incomeAmortization of patentPayment to Indigo Company

$enter a total amount

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