On January 1, 2017. Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,106,550 cash. On the acquisition date. GaugeRite had the following balance sheet: Cash Accounts receivable Land Equipment (net) $ 87, e8e 196,080 724,880 1,953,880 $ 2,960,880 Accounts payable Long-term debt Common stock Retained earnings $ 172,880 977,080 1,884,08 727.280 $ 2,960, eee At the acquisition date, the following allocation was prepared: $ 2.126.550 1,811.ee 295,550 Fair value of consideration transferred Book value acquired Excess fair value over book value To in-process research and development To equipment (8-year remaining life) To goodwill (indefinite life) $ 66,750 96,800 163,552 132,eee Although at acquisition date Procise had expected $66,750 in future benefits from GaugeRite's 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. On December 31, 2018. Procise and GaugeRite submitted the following trial balances for consolidation. There were no intra-entity payables on that date. Sales Cost of goods sold Depreciation expense Other operating expenses Subsidiary income Net income Retained earnings 1/1/18 Net income Dividends declared Retained earnings 12/31/18 Cash Accounts receivable Inventory Investment in GaugeRite Land Equipment (net) Goodwill Total assets Accounts payable Long-term debt Common stock Retained earnings 12/31/18 Total liabilities and equity Procise $ (3,535,850) 1,640,000 332,899 229,750 (241,980) $ (1.585.eae) $ (3,845, eee) (1,585, 800) 180,000 $ (4,530,000) 2,500 913,899 940, eee 2,489,500 3,49e, eae 5,127. see 295,808 $ 13, 257,500 $ (275,890) $ (3,382.see) (5, 150, 200) (4,530,000) $(13,257,500) GaugeRite $(1,169,500) 745, eee 136, 80e 34,5ee 3 $ (254, eee) $ (974,890) (254.eee) 27,100 $(1,280,908) $ 29,900 240, eee 714,000 716. eee 1,885,000 $ 3,584,900 $ (413.eae) $ (807,000) (1,884, 80e) (1,280,900) $(3,584,900) a. Show how Procise derived its December 31, 2018. Investment in GaugeRite account balance. c. Prepare a consolidated worksheet for Procise and GaugeRite as of December 31, 2018. Required A Required c Show how Procise derived its December 31, 2018, Investment in GaugeRite account balance. (Amounts to be deducted should be indicated by a minus sign.) Consideration transferred 1/1/17 Investment balance 12/31/18 Accounts Consolidated Totals Sales Cost of goods sold Depreciation expense Other operating expenses Subsidiary income Net Income for the year ended December 31, 2018 Consolidation Entries 12/31/18 12/31/18 Debit Credit Procise GaugeRite S (3.535,850) S (1,169,500) 1.840,000 745.000 332.000 138.000 220.750 34,500 (241.900) (241,900) of S (1,585,000) $ 254.000 Retained earnings 1/1/18 Net Income Dividends declared Retained earnings 12/31/18 S (3.045,000) (1,585,000) 100.000 S (4,530,000) S (974,000) 254,000) 27.100 S (1,200,000) Cash S S 29.900 240.000 714,000 01 Accounts receivable Inventory Investment in GaugeRite Land Equipment (net) Goodwill Total assets 2.500 913.000 940,000 2.489.500 3.490.000 5.127.500 295.000 13.257.500 716.000 1.805.000 | S S 3.504.900 S S (275,000) (3.302,500) (5.150,000) (413,000) (807,000) Accounts payable Long-term debt Common stock-Procise Common stock-GaugeRite Retained earnings 12/31/18 Total liabilities and equity (4,530,000) S(13,257,500) (1,084,000) (1.200.900) S (3.504.900) S 0 S 0