P$11\mathrm{.}6(\backslash (20\backslash \%\backslash ),$ A$)($Accounting for R$\backslash$&D Costs$)$ During $2023,$ Wright Tool Company purchased a building site for its proposed research and development laboratory at a cost of $\backslash (\backslash$$ $60,000\backslash ).$ Construction of the building was started in $2023.$ The building was completed on December $31,2024,$ at a cost of $\backslash (\backslash$$ $320,000\backslash )$ and was placed in service on January $2,2025.$ 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 $\backslash (50\backslash \%\backslash )$ 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 $2025$ appears below. $\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|$l$|\}\backslash$hline & Number of Projects & Salauies and Employee Benefits & Other Bxpenses $($excluding Building Depreciation Charges$)\backslash \backslash \backslash$hline Completed projects with long$-$term benefits & $15$ & $\backslash$$$90,000$ & $\backslash$$$50,000\backslash \backslash \backslash$hline Abandoned projects or projects that benefit the current period & $10$ & $65,000$ & $15,000\backslash \backslash \backslash$hline $\backslash$begin$\{$tabular$\}\{$l$\}$ Projects in process$-$results indeterminate $\backslash \backslash$ Total $\backslash$end$\{$tabular$\}$ & $5$ & $40,000$ & $12,000\backslash \backslash \backslash$hline & $30$ & $\backslash$$$195,000$ & $\backslash$$$77,000\backslash \backslash \backslash$hline $\backslash$end$\{$tabular$\}$ Upon recommendation of the research and development group, Wright Tool Company acquired a patent for manufacturing rights at a cost of $\backslash (\backslash$$ $88,000\backslash ).$ The patent was acquired on April $1,2024,$ and has an economic life of $10$ years. $13$strakions 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? a$.$ 'The company's income statement for $2025.$ b$.$ The company's balance sheet as of December $31,2025.$ Be sure to give account titles and amounts, and briefly justify your presentation. $($CMA adapted$)$