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) $ 37,000 113,000 768,000 1,954,000 $ 2,872,000 Accounts payable Long-term debt Corrmon stock Retained earnings $ 180,000 940,000 1,078,000 674,000 $ 2,872,000 At the acquisition date, the following allocation was prepared: $ 2,051,050 1,752,000 299,050 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) $ 62,250 96,800 159,050 140,000 $ 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. 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) 1,665,000 326,000 216,500 (288,900) $ (1,680,000) $ (3,007,500) (1,680,000) 200,000 $ (4,487,500) 22,350 856,000 902,000 2,396,650 3,467,500 5,025,000 386,000 $ 13,055,500 $ (283,000) $ (3,135,000) (5,150,000) (4,487,500) $(13,055,500) $ (301,000) $ (832,000) (301,000) 26,950 $(1,106,050) $ 146,050 178,000 809,000 737,000 1,775,000 $ 3,545,050 $ (470,000) $ (891,000) (1,078,000) (1,106,050) $(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. 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 GaugeRite account balance. (Amounts to be deducted should be indicated by a minus sign.) Consideration transferred 1/1/17 Investment balance 12/31/18 Consolidated Totals Accounts Sales Cost of goods sold Depreciation expense Other operating expenses Subsidiary income Net Income Consolidated Worksheet for the year ended December 31, 2018 Consolidation Entries 12/31/18 12/31/18 Debit Credit Procise GaugeRite $ (3,598,600) $ (1,186,000) 1,665,000 717,500 326,000 134,000 216,500 33,500 (288,900) $ (1,680,000) $ 301,000 Retained earnings 1/1/18 Net Income Dividends declared Retained earnings 12/31/18 $ (3,007 500) (1,680,000) 200,000 $ (4,487,500) $ (832,000) (301,000) 26,950 $ (1,106,050) $ 46,050 178,000 809,000 Cash Accounts receivable Inventory Investment in GaugeRite Land Equipment (net) Goodwill Total assets $ 22,350 856,000 902,000 2,396,650 3,467,500 5,025,000 386,000 $ 13,055,500 737,000 1,775,000 $ 3,545,050 $ $ (283,000) (3,135,000) 6,150,000) (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) (1,106,050) $ (3,545,050) $ 0 $ 0