On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,016,500 cash. On the acquisition date, GaugeRite had the following balance sheet:

Cash	$	83,000		Accounts payable	$	169,000
Accounts receivable		192,000		Long-term debt		1,028,000
Land		721,000		Common stock		1,065,000
Equipment (net)		1,937,000		Retained earnings		671,000
	$	2,933,000			$	2,933,000

At the acquisition date, the following allocation was prepared:

Fair value of consideration transferred				$	2,016,500
Book value acquired					1,736,000
Excess fair value over book value					280,500
To in-process research and development	$	52,500
To equipment (8-year remaining life)		80,000			132,500
To goodwill (indefinite life)				$	148,000

Although at acquisition date Procise had expected $52,500 in future benefits from GaugeRites in-process research and development project, by the end of 2017, it was apparent that the research project was a failure with no future economic benefits.

On December 31, 2018, Procise and GaugeRite submitted the following trial balances for consolidation. There were no intra-entity payables on that date.

	Procise				GaugeRite
Sales	$	(3,651,000	)		$	(1,106,500	)
Cost of goods sold		1,717,500				712,500
Depreciation expense		338,000				138,000
Other operating expenses		225,000				34,000
Subsidiary income		(212,000	)			0
Net income	$	(1,582,500	)		$	(222,000	)
Retained earnings 1/1/18	$	(3,007,500	)		$	(918,000	)
Net income		(1,582,500	)			(222,000	)
Dividends declared		100,000				26,625
Retained earnings 12/31/18	$	(4,490,000	)		$	(1,113,375	)
Cash	$	45,125			$	\84,375	\
Accounts receivable		874,000				234,000
Inventory		964,000				607,000
Investment in GaugeRite		2,386,375				0
Land		3,302,500				745,000
Equipment (net)		5,230,000				1,820,000
Goodwill		326,000				0
Total assets	$	13,128,000			$	3,490,375
Accounts payable	$	(243,000	)		$	(468,000	)
Long-term debt	$	(3,245,000	)		$	(844,000	)
Common stock		(5,150,000	)			(1,065,000	)
Retained earnings 12/31/18		(4,490,000	)			(1,113,375	)
Total liabilities and equity	$	(13,128,000	)		$	(3,490,375	)

1. Show how Procise derived its December 31, 2018, Investment in GaugeRite account balance

2. Show how Procise derived its December 31, 2018, Investment in GaugeRite account balance. (Amounts to be deducted should be indicated by a minus sign.

invesment balance 12/31/2018

1. Prepare a consolidated worksheet for Procise and GaugeRite as of December 31, 2018.

2. Prepare a consolidated worksheet for Procise and GaugeRite as of December 31, 2018. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Consolidated Totals column should be entered with a minus sign.)