On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,051,050 cash. On the acquisition date, GaugeRite had the following balance sheet: Cash Accounts receivable Land Equipment (net) $ 37,00 113,eee 768,60 1,954,600 $ 2,872,eee Accounts payable Long-term debt Common stock Retained earnings $ 180,00 940, eee 1,878,888 674,000 $ 2,872,888 At the acquisition date, the following allocation was prepared: $ 2.051,850 1,752,00 299,50 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) $ 62,25 159,05 140,eee Although at acquisition date Procise had expected $62,250 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. Gaugerite $ (1,186,000) 717,500 134,000 33,500 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 $ (3,598,600) 1,665, bee 326, eee 216,500 (288,900) $ (1,680,000) $ (3,887,588) (1,680,60e) 200,000 $ (4,487,500) 22,350 856,000 992,00 2,396,65 3,467,500 5,025,000 386.000 $ 13,055,500 (283,eee) $ (3,135,000) (5,150,000) (4,487,500) $(13,055,500) $ (301,000) $ (832,800) (301,200) 26.95 $(1,186,050) 146,850 178,000 899,00 737, 1,775, eee $ 3,545,05 $ (470,eee) $ (891, eee) (1,078, ) (1,186,650) $ (3,545,050) 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. Complete this question by entering your answers in the tabs below. Required A Required C Show how Procise derived its December 31, 2018, Investment in Gauge Rite account balance. (Amounts to be deducted should be indicated by a minus sign.) Consideration transferred 1/1/17 Investment balance 12/31/18 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.) Show less Accounts Consolidated Totals Sales Cost of goods sold Depreciation expense Other operating expenses Subsidiary income Net Income Procise and Subsidiary GaugeRite Consolidated Worksheet for the year ended December 31, 2018 Consolidation Entries 12/31/18 12/31/18 Credit Procise Debit Gauge Rite $ (3.593.600) $ (1.180,000) 1.665,000 717.500 326.000 134.000 216.500 33.500 (288.900) of $ (1.680,000) $ 301.000 Retained earnings 1/1/18 Net Income Dividends declared Retained earnings 12/31/18 $ (3,007,500) (1.880,000) 200.000 $ (4.487,500) $ (832,000) (301,000) 26.950 $ (1.108,050) s $ 46,050 178.000 8 09,000 Cash Accounts receivable Inventory Investment in Gauge Rite Land Equipment (net) Goodwill $ 22,350 856.000 902.000 2.396,850 3,467,500 5,025,000 386.000 $ 13,055,500 737.000 1,775,000 Total assets $ 3,545,050 $ $ (283.000) (3.135.000) (5.150.000) (470.000) (891,000) Accounts payable Long-term debt Common stock-Procise Common stock-GaugeRite Retained earnings 12/31/18 Total liabilities and equity | (4.487.500) $(13.055,500) (1.078.000) (1.108,050) $ (3.545.050) $ 0 $ 0 $ 0 On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,051,050 cash. On the acquisition date, GaugeRite had the following balance sheet: Cash Accounts receivable Land Equipment (net) $ 37,00 113,eee 768,60 1,954,600 $ 2,872,eee Accounts payable Long-term debt Common stock Retained earnings $ 180,00 940, eee 1,878,888 674,000 $ 2,872,888 At the acquisition date, the following allocation was prepared: $ 2.051,850 1,752,00 299,50 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) $ 62,25 159,05 140,eee Although at acquisition date Procise had expected $62,250 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. Gaugerite $ (1,186,000) 717,500 134,000 33,500 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 $ (3,598,600) 1,665, bee 326, eee 216,500 (288,900) $ (1,680,000) $ (3,887,588) (1,680,60e) 200,000 $ (4,487,500) 22,350 856,000 992,00 2,396,65 3,467,500 5,025,000 386.000 $ 13,055,500 (283,eee) $ (3,135,000) (5,150,000) (4,487,500) $(13,055,500) $ (301,000) $ (832,800) (301,200) 26.95 $(1,186,050) 146,850 178,000 899,00 737, 1,775, eee $ 3,545,05 $ (470,eee) $ (891, eee) (1,078, ) (1,186,650) $ (3,545,050) 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. Complete this question by entering your answers in the tabs below. Required A Required C Show how Procise derived its December 31, 2018, Investment in Gauge Rite account balance. (Amounts to be deducted should be indicated by a minus sign.) Consideration transferred 1/1/17 Investment balance 12/31/18 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.) Show less Accounts Consolidated Totals Sales Cost of goods sold Depreciation expense Other operating expenses Subsidiary income Net Income Procise and Subsidiary GaugeRite Consolidated Worksheet for the year ended December 31, 2018 Consolidation Entries 12/31/18 12/31/18 Credit Procise Debit Gauge Rite $ (3.593.600) $ (1.180,000) 1.665,000 717.500 326.000 134.000 216.500 33.500 (288.900) of $ (1.680,000) $ 301.000 Retained earnings 1/1/18 Net Income Dividends declared Retained earnings 12/31/18 $ (3,007,500) (1.880,000) 200.000 $ (4.487,500) $ (832,000) (301,000) 26.950 $ (1.108,050) s $ 46,050 178.000 8 09,000 Cash Accounts receivable Inventory Investment in Gauge Rite Land Equipment (net) Goodwill $ 22,350 856.000 902.000 2.396,850 3,467,500 5,025,000 386.000 $ 13,055,500 737.000 1,775,000 Total assets $ 3,545,050 $ $ (283.000) (3.135.000) (5.150.000) (470.000) (891,000) Accounts payable Long-term debt Common stock-Procise Common stock-GaugeRite Retained earnings 12/31/18 Total liabilities and equity | (4.487.500) $(13.055,500) (1.078.000) (1.108,050) $ (3.545.050) $ 0 $ 0 $ 0