Presented below is selected information for Alatorre Company.Answer the questions asked about each of the factual situations.1. Alatorre purchased a patent from Vania Co. for $1,657,300 on January 1, 2012. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2022. During 2014, Alatorre determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2014?The amount to be reported$2. Alatorre bought a franchise from Alexander Co. on January 1, 2013, for $322,200. The carrying amount of the franchise on Alexander’s books on January 1, 2013, was $547,500. The franchise agreement had an estimated useful life of 30 years. Because Alatorre must enter a competitive bidding at the end of 2015, it is unlikely that the franchise will be retained beyond 2022. What amount should be amortized for the year ended December 31, 2014?The amount to be amortized$3. On January 1, 2014, Alatorre incurred organization costs of $295,000. What amount of organization expense should be reported in 2014?The amount to be reported$4. Alatorre purchased the license for distribution of a popular consumer product on January 1, 2014, for $158,300. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of 5 years but by paying a nominal fee, Alatorre can renew the license indefinitely for successive 5-year terms. What amount should be amortized for the year ended December 31, 2014?The amount to be amortized$WarningDon’t show me this message again for the assignmentOk Cancel Exercise 12-11 (Part Level Submission)Exercise 12-11 (Part Level Submission)Tones Industries has the following patents on its December 31, 2013, balance sheet.Patent ItemInitial CostDate AcquiredUseful Life at Date AcquiredPatent A$51,6123/1/1017 yearsPatent B$17,8807/1/1110 yearsPatent C$27,3609/1/124 yearsThe following events occurred during the year ended December 31, 2014.1.Research and development costs of $252,700 were incurred during the year.2.Patent D was purchased on July 1 for $34,656. This patent has a useful life of 91/2 years.3.As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B’s value may have occurred at December 31, 2014. The controller for Tones estimates the expected future cash flows from Patent B will be as follows.YearExpected Future Cash Flows2015$1,81020161,81020171,810The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)WarningDon’t show me this message again for the assignmentOk Cancel (a)Compute the total carrying amount of Tones’ patents on its December 31, 2013, balance sheet. (Round all answers to 0 decimal places, e.g. 8,564)Total carrying amount$WarningDon’t show me this message again for the assignmentOk Cancel (b)Compute the total carrying amount of Tones’ patents on its December 31, 2014, balance sheet. (Round all answers to 0 decimal places, e.g. 8,564)Total carrying amount$WarningDon’t show me this message again for the assignmentOk Cancel Exercise 12-14 (Part Level Submission)Exercise 12-14 (Part Level Submission)Presented below is information related to copyrights owned by Walter de la Mare Company at December 31, 2014.Cost$8,618,700Carrying amount4,292,000Expected future net cash flows4,039,600Fair value3,365,800Assume that Walter de la Mare Company will continue to use this copyright in the future. As of December 31, 2014, the copyright is estimated to have a remaining useful life of 10 years.WarningDon’t show me this message again for the assignmentOk Cancel (a)Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2014. The company does not use accumulated amortization accounts. (If no entry is required, select ‘No entry’ for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCreditWarningDon’t show me this message again for the assignmentOk Cancel (b)Prepare the journal entry to record amortization expense for 2015 related to the copyrights. (If no entry is required, select ‘No entry’ for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCreditWarningDon’t show me this message again for the assignmentOk Cancel (c)The fair value of the copyright at December 31, 2015, is $3,365,800. Prepare the journal entry (if any) necessary to record the increase in fair value. (If no entry is required, select ‘No entry’ for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCreditWarningDon’t show me this message again for the assignmentOk Cancel Problem 12-4 (Part Level Submission)Problem 12-4 (Part Level Submission)During 2012, Robin Wright Tool Company purchased a building site for its proposed research and development laboratory at a cost of $61,040. Construction of the building was started in 2012. The building was completed on December 31, 2013, at a cost of $339,500 and was placed in service on January 2, 2014. The estimated useful life of the building for depreciation purposes was 20 years. The straight-line method of depreciation was to be employed, and there was no estimated residual value.Management estimates that about 50% of the projects of the research and development group will result in long-term benefits (i.e., at least 10 years) to the corporation. The remaining projects either benefit the current period or are abandoned before completion. A summary of the number of projects and the direct costs incurred in conjunction with the research and development activities for 2014 appears below.Numberof ProjectsSalaries and EmployeeBenefitsOther Expenses(excluding Building Depreciation Charges)Completed projects with long-term benefits16$90,990$54,010Abandoned projects or projects that benefit the current period868,00018,170Projects in process—results indeterminate446,19012,060Total28$205,180$84,240Upon recommendation of the research and development group, Robin Wright Tool Company acquired a patent for manufacturing rights at a cost of $88,000. The patent was acquired on April 1, 2013, and has an economic life of 10 years.If generally accepted accounting principles were followed, how would the items above relating to research and development activities be reported on the following financial statements?WarningDon’t show me this message again for the assignmentOk Cancel (a)The company’s income statement for 2014.Robin Wright Tool CompanyIncome Statement (Partial)$WarningDon’t show me this message again for the assignmentOk Cancel (b)The company’s balance sheet as of December 31, 2014.Robin Wright Tool CompanyBalance Sheet (Partial)$