On January 1, 2020, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $1,967,700 cash. On the acquisition date, GaugeRite had the following balance sheet: Cash Accounts receivable: Land Equipment (net) Total assets $ 63,000 177,000 Accounts payable Long-term debt 708,000 Common stock $ 178,000 1,007,000 1,017,000 1,930,000 $2,878,000 Retained earnings Total liabilities and equity 676,000 $2,878,000 At the acquisition date, the following allocation was prepared: Fair value of consideration transferred Book value acquired Excess fair value over book value $ 1,967,709 1,693,00 274,700 To in-process research and development $ 67,500 To equipment (8-year remaining life) 59,200 126,700 To goodwill (indefinite life) 148,000 Although at acquisition date Procise had expected $67,500 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. On December 31, 2021, Procise and GaugeRite submitted the following financial statements for consolidation. There were no intra- entity payables on that date. Sales Cost of goods sold Depreciation expense Other operating expenses Subsidiary income Net income Retained earnings 1/1/21 Net income Dividends declared Cash Retained earnings 12/31/21 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 $ (3,740,400) Gaurerite $(1,158,500) 1,760,000 338,000 722,500 133,000 225,000 33,000 (262,600) $ (1,680,000) $ (270,000) $ (3,160,000) $ (855,000) (1,680,000) (270,000) 100,000 $ (4,740,000) $ 41,525 910,000 920,000 2,308,975 3,642,500 5,230,000 305,000 $ 13,358,000 $ (233,000) (3,235,000)) (5,150,000) (4,740,000) 25,425 $(1,099,575) $ 96,575 216,000 612,00 775,000 1,760,000 $ 3,459,575 $ (452,000) (891,000) (1,017,000) (1,099,575) $(13,358,000) $(3,459,575) 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. Required A Required C Show how Procise derived its December 31, 2021, Investment in GaugeRite account balance. C be indicated by a minus sign.) Consideration transferred 1/1/20 Increase in GaugeRite's retained earnings to 1/1/21 In-process R&D write-off in 2020 Dividends declared 2021 Amortization 2021 Investment balance 12/31/21 Amounts $ 0 Consolidated Worksheet for the year ended December 31, 2021 Consolidation Entries Sales Accounts Cost of goods sold Depreciation expense Other operating expenses Subsidiary income Net Income 12/31/21 Procise 12/31/21 GaugeRite $ (3,740,400) $ (1,158,500) 1,760,000 722,500 338,000 133,000 225,000 33,000 (262,600) 0 $ (1,680,000) $ 270,000 Retained earnings 1/1/21 Net Income Dividends declared $ (3,160,000) $ (855,000) (1,680,000) (270,000) 100,000 25,425 Retained earnings 12/31/21 $ (4,740,000) $ (1,099,575) Debit Credit Consolidated Totals Cash $ 41,525 $ 96,575 Accounts receivable 910,000 216,000 Inventory 920,000 612,000 Investment in GaugeRite 2,308,975 0 Land 3,642,500 775,000 Equipment (net) 5,230,000 305,000 1,760,000 0 $ 14,701,000 Goodwill Total assets Accounts payable Long-term debt Common stock-Procise Common stock-GaugeRite Retained earnings 12/31/21 Total liabilities and equity $ 13,358,000 $3,459,575 $ (233,000) $ (452,000) (3,235,000) (891,000) (5,150,000) (4,740,000) $(13,358,000) (1,017,000) (1,099,575) $ (3,459,575) S 0 $ 0 $ 14.701.000