Exercise 12-8 (Part Level Submission) Sunland Company has provided information on intangible assets as follows. A patent was purchased from Ford Company for $2,506,000 on January 1, 2016. Sunland estimated the remaining useful life of the patent to be 10 years. The patent was carried in Ford's accounting records at a net book value of $1,968,000 when Ford sold it to Sunland. During 2017, a franchise was purchased from Polo Company for $530,000. In addition, 4% of revenue from the franchise must be paid to Polo. Revenue from the franchise for 2017 was $2,431,000. Sunland estimates the useful life of the franchise to be 10 years and takes a full year's amortization in the year of purchase. Sunland incurred research and development costs in 2017 as follows. Materials and equipment Personnel $143,100 186,700 107,300 Indirect costs $437,100 Sunland estimates that these costs will be recouped by December 31, 2020. The materials and equipment purchased have no alternative uses. On January 1, 2017, because of recent events in the field, Sunland estimates that the remaining life of the patent purchased on January 1, 2016, is only 5 years from January 1, 2017. (a) Your answer is partially correct. Try again. Prepare the intangibles section of Sunland's balance sheet at December 31, 2017. (Enter account name only and do not provide descriptive information.) SUNLAND COMPANY Intangibles Section of Balance Sheet December 31, 2017 Intangible Assets X Patents 2506000 Franchises 530000 x Total Intangible Assets 3036000