On January 1, 2020, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,038,100 cash. On the acquisition date GaugeRite had the following balance sheet Cash Accounts receivable Lond Equipment (net) Total assets $ 93,000 133.000 731.000 1,975.000 5.2.933,000 Accounts payable Longtere debt Con stock Retained rings Total liabilities and equity 5 205,000 975,000 1,018,000 734.000 $ 2,933,00 At the acquisition date, the following allocation was prepared 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 goodwili (indefinite life) $ 2,038, 100 1,252,000 286, 100 $ 53,500 97,608 151, 100 135. eee S Although at acquisition date Procise had expected $53,500 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- enuty payables on that date Procise Gaugerite Sales $ (3,672,700) $61,183,250) Cost of goods sold 1,230,000 727.500 Depreciation expense 334,000 148,000 Other operating expenses 222,50 36,750 Subsidiary Incore (255,500) Net Income 5 (1,645,008) 5 (271,800) Reteined carnings 1/1/21 $ (3,240,900) (933,000 Net Income (1.645,890) (271,200 Dividends declared 100,000 25.450 Retained earnings 12/3121 54.755,000) $(1.178,550) Cash 5 42,250 5 68,950 Accounts receivable 363,000 162,000 Inventory 953,000 609,000 Investment in Gaugerite 2,404,750 8 Land 3,607,500 744,000 Equipment (net) 5,165,000 1,947,500 Goodwill 297.000 Total assets $ 13,331,500 $ 3,322,350 Accounts payable 5 (214,920) S (437,00) Long-term debt (3,182,500) (889.000) Common stock (5,150,000 (1,016,000) Retained earnings 12/31/21 4 785,000) 1,178,550) Total liabilities and equity 153,331500) EXE22,550) o. 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 On January 1, 2020, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,038,100 cash. On the acquisition date GaugeRite had the following balance sheet Cash Accounts receivable Lond Equipment (net) Total assets $ 93,000 133.000 731.000 1,975.000 5.2.933,000 Accounts payable Longtere debt Con stock Retained rings Total liabilities and equity 5 205,000 975,000 1,018,000 734.000 $ 2,933,00 At the acquisition date, the following allocation was prepared 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 goodwili (indefinite life) $ 2,038, 100 1,252,000 286, 100 $ 53,500 97,608 151, 100 135. eee S Although at acquisition date Procise had expected $53,500 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- enuty payables on that date Procise Gaugerite Sales $ (3,672,700) $61,183,250) Cost of goods sold 1,230,000 727.500 Depreciation expense 334,000 148,000 Other operating expenses 222,50 36,750 Subsidiary Incore (255,500) Net Income 5 (1,645,008) 5 (271,800) Reteined carnings 1/1/21 $ (3,240,900) (933,000 Net Income (1.645,890) (271,200 Dividends declared 100,000 25.450 Retained earnings 12/3121 54.755,000) $(1.178,550) Cash 5 42,250 5 68,950 Accounts receivable 363,000 162,000 Inventory 953,000 609,000 Investment in Gaugerite 2,404,750 8 Land 3,607,500 744,000 Equipment (net) 5,165,000 1,947,500 Goodwill 297.000 Total assets $ 13,331,500 $ 3,322,350 Accounts payable 5 (214,920) S (437,00) Long-term debt (3,182,500) (889.000) Common stock (5,150,000 (1,016,000) Retained earnings 12/31/21 4 785,000) 1,178,550) Total liabilities and equity 153,331500) EXE22,550) o. 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