On January 1, 2020, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,099,600 cash. On the acquisition date, GaugeRite had the following balance sheet: Cash Accounts receivable Land Equipment (net) Total assets $ 152,000 137,000 730,000 1,942,000 $2,961,000 Accounts payable Long-term debt Common stock Retained earnings Total liabilities and equity $ 184,000 985,000 1,049,000 743,000 $2,961,000 At the acquisition date, the following allocation was prepared: $ 2,099,600 1,792,000 307,600 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) $ 44,000 133, 600 $ 177,600 130,000 Although at acquisition date Procise had expected $44,000 in future benefits from GaugeRite's in-process research and development project, by the end of 2020 it was apparent that the research project was a failure with no future economic benefits. On December 31, 2021, Procise and GaugeRite submitted the following financial statements for consolidation. There were no intra- entity payables on that date. GaugeRite $(1,166,250) 745,000 147,000 37,250 Sales Cost of goods sold Depreciation expense Other operating expenses Subsidiary income Net income Retained earnings 1/1/21 Net income Dividends declared Retained earnings 12/31/21 Cash Accounts receivable Inventory Investment in GaugeRite Land Equipment (net) Goodwill Total assets Accounts payable Long-term debt Common stock Retained earnings 12/31/21 Total liabilities and equity Procise $ (3,795, 200) 1,810,000 335,000 223,000 (220, 300) $ (1,647,500) $ (3,052,500) (1,647,500) 300,000 $ (4,400,000) $ 110,025 937,000 908,000 2, 425,975 3,120,000 5,180,000 354,000 $ 13,035,000 $ (220, 000) (3, 265, 000) (5, 150, 000) (4,400,000) $(13,035, 000) $ (237,000) $ (936, 000) (237,000) 26, 225 $(1, 146, 775) $ 6, 275 164,000 613,000 0 760,000 1,942,500 0 $ 3,485, 775 $ (455, 000) (835, 000) (1,049, 000) (1, 146, 775) $(3,485,775) a. Show how Procise derived its December 31, 2021, Investment in GaugeRite account balance. c. Prepare a consolidated worksheet for Procise and GaugeRite as of December 31, 2021. Complete this question by entering your answers in the tabs below. Required A Required Show how Procise derived its December 31, 2021, Investment in GaugeRite account balance. (Amounts to be deducted should be indicated by a minus sign.) Amounts Consideration transferred 11/20 Income 2021 Dividends declared 2021 In-process R&D write-off in 2020 Amortization 2020 Amortization 2021 Increase in GaugeRite's retained earnings to 1/1/21 Investment balance 12/31/21 $ 0 Prepare a consolidated worksheet for Procise and GaugeRite as of December 31, 2021. (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. Input all amounts as positive values.) Show less Consolidated Totals Accounts 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, 2021 Consolidation Entries 12/31/21 12/31/21 Debit Credit Procise GaugeRite $ (3,795,200) $ (1,166,250) 1,810,000 745,000 335,000 147,000 223,000 37,250 (220,300) 0 $ (1,647,500) $ 237,000 Retained earnings 1/1/21 Net Income Dividends declared Retained earnings 12/31/21 $ (3,052,500) $ (936,000) (1,647,500) (237,000) 300,000 26,225 $ (4.400,000) $ (1,146,775) Cash Accounts receivable Inventory Investment in GaugeRite Land Equipment (net) Goodwill Total assets $ 110,025 $ 6,275 937,000 164,000 908,000 613,000 2,425,975 0 3,120,000 760,000 5,180,000 1,942,500 354,000 $ 13,035,000 $ 3,485,775 $ 14,325,000 Accounts payable Long-term debt Common stockProcise Common stock-GaugeRite Retained earnings 12/31/21 Total liabilities and equity $ (220,000) $ (455,000) (3,265,000) (835,000) (5,150,000) (1,049,000) (4,400,000) (1,146,775) $(13,035,000) $ (3,485,775) $ 0 $ 0 $ 14,325,000 Required