Response to the following problem:
This exercise summarizes the accounting for patents and research and development costs.
Questor Applications paid $800,000 to research and develop a new software program. Questor also paid $500,000 to acquire a patent on other software. After readying the software for production, Questor's sales revenue for the first year totaled $1,700,000. Cost of goods sold was $200,000, and selling expenses were $400,000. All these transactions occurred during 20X5. Questor expects the patent to have a useful life of five years.
Prepare Questor Applications' income statement for the year ended December 31, 20X5, complete with a heading.