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On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $1,947,900 cash. On the acquisition date, GaugeRite
On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $1,947,900 cash. On the acquisition date, GaugeRite had the following balance sheet: Cash $151,800 933,000 1,020,0ee 679,000 $27,00 Accounts payable 119,000 Long-term debt 72e,000 Common stock 1,917,000 Retained earnings Accounts receivable Land Equipment (net) $ 2,783,000 $2,783,e00 At the acquisition date, the following allocation was prepared Fair value of consideration transferred Book value acquired Excess fair value over book value $ 1,947,900 1,699,900 248,900 $44,5ee 66,400 To in-process research and development To equipment (8-year remaining life) To goodwill (indefinite life) 11e,900 $138,800 Although at acquisition date Procise had expected $44,500 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 $ (3,715,800 (1,026, 500) 635,000 137,000 34,500 Procise Sales Cost of goods sold Depreciation expense Other operating expenses Subsidiary income 1,735,000 324,000 216,000 (211,70e) $ (1,652,500) (220,000) Net income Retained earnings 1/1/18 $(3,162,500) (910,000) ( 220,088) 25,500 (1,652,500) 188,088 Net income Dividends declared Retained earnings 12/31/18 $ (4,715,e00) (1,104,500) Cash $194,200 883,000 972,000 2,312,300 3,672,500 5,000,000 375,000 $136,500 211,000 611,000 Accounts receivable Inventory Investment in GaugeRite 796,000 1,815,000 Land Equipment (net) Goodwi11 $ 13,409,000 $ 3,469,500 Total assets $(224,000) $ (496,000) $(3,32e,e00) $ (849,000) (5,150,90e) (4,715,0ee) $(13,409,900) $(3,469,500) Accounts payable Long-term debt Common stock (1,02e,e00) (1,104,5ee) Retained earnings 12/31/18 Total liabilities and equity c. Prepare a consolidated worksheet for Procise and GaugeRite as of December 31, 2018
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