On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,040,050 cash. On the acquisition date, GaugeRite had the following balance sheet:

Cash	$	96,000		Accounts payable	$	216,000
Accounts receivable		166,000		Long-term debt		950,000
Land		742,000		Common stock		1,006,000
Equipment (net)		1,911,000		Retained earnings		743,000
	$	2,915,000			$	2,915,000

At the acquisition date, the following allocation was prepared:

Fair value of consideration transferred				$	2,040,050
Book value acquired					1,749,000
Excess fair value over book value					291,050
To in-process research and development	$	44,250
To equipment (8-year remaining life)		112,800			157,050
To goodwill (indefinite life)				$	134,000

Although at acquisition date Procise had expected $44,250 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	$	(3,886,850	)		$	(1,195,500	)
Cost of goods sold		1,762,500				780,000
Depreciation expense		331,000				141,000
Other operating expenses		220,750				35,500
Subsidiary income		(224,900	)			0
Net income	$	(1,797,500	)		$	(239,000	)
Retained earnings 1/1/18	$	(3,047,500	)		$	(913,000	)
Net income		(1,797,500	)			(239,000	)
Dividends declared		100,000				25,150
Retained earnings 12/31/18	$	(4,745,000	)		$	(1,126,850	)
Cash	$	170,050			$	\97,850	\
Accounts receivable		903,000				217,000
Inventory		967,000				504,000
Investment in GaugeRite		2,351,450				0
Land		3,617,500				779,000
Equipment (net)		5,117,500				1,865,000
Goodwill		315,000				0
Total assets	$	13,441,500			$	3,462,850
Accounts payable	$	(274,000	)		$	(433,000	)
Long-term debt	$	(3,272,500	)		$	(897,000	)
Common stock		(5,150,000	)			(1,006,000	)
Retained earnings 12/31/18		(4,745,000	)			(1,126,850	)
Total liabilities and equity	$	(13,441,500	)		$	(3,462,850	)

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

consideration transferred 1/1/2017
investment balance 12/31/18