Question - Given below are costs incurred during 2012 and 2013 by a company that follows the policy of decreasing the intangible asset account directly as amortized.
Research was conducted to discover a new product and costs of $400,000 in 2012 and $800,000 in 2013 were incurred. After several months, a product was created and a patent secured for a cost of $180,000, effective as of July 1, 2013. The company expects to have increased revenues of $500,000 over the next several years. The patent is expected to be useful for the next 10 years.
Prepare a partial income statement for the year ended December 31, 2013.