On January 1, 2020, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,133,050 cash. On the acquisition date, GaugeRite had the following balance sheet: Cash Accounts receivable Land Equipment (net) Total assets $ 174,000 125,000 705,000 1,943,000 $ 2,947,000 Accounts payable Long-term debt Common stock Retained earnings Total liabilities and equity $ 138,000 1,015,000 1,076,000 718,000 $ 2,947,000 At the acquisition date, the following allocation was prepared: $ 2,133,050 1,794,000 339,050 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) $ 67,250 124,800 192,050 147,000 Although at acquisition date Procise had expected $67,250 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 $(1,296,250) 867,500 146,000 36,750 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 $ (3,654,350) 1,685,000 328,000 219, 250 (230,400) $ (1,652,500) $ (3,117,500) (1,652,500) 200,000 $ (4,570,000) $ 87,800 841,000 904,000 2,426,700 3,607,500 5,072,500 313,000 $ 13,252,500 $ (220,000) (3,312,500) (5,150,000) (4,570,000) $(13,252,500) (246,000) $ (891,000) (246,000) 26,900 $(1,110,100) $ 48,600 181,000 504,000 764,000 1,927,500 $ 3,425,100 $ (410,000) (829,000) (1,076,000) (1,110,100) $ (3,425,100) 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 C 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 $ 2,133,050 Consideration transferred 1/1/20 Increase in GaugeRite's retained earnings to 1/1/21 In-process R&D write-off in 2020 Amortization 2020 (67,250) Income 2021 Dividends declared 2021 Amortization 2021 Investment balance 12/31/21 $ 2,065,800 Required A Required C 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 Accounts Consolidated Totals Sales 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 $ (3,654,350) $ (1,296,250) 1,685,000 867,500 328,000 146,000 219,250 36,750 (230,400) 0 $ (1,652,500) $ 246,000 Cost of goods sold Depreciation expense Other operating expenses Subsidiary income Net Income Retained earnings 1/1/21 Net Income $ (3,117,500) $ (891,000) (1,652,500) (246,000) 200,000 26,900 $ (4,570,000) $ (1,110,100) Dividends declared Retained earnings 12/31/21 Cash Accounts receivable Inventory Investment in GaugeRite Land Equipment (net) Goodwill Total assets $ 87,800 $ 48,600 841,000 181,000 904,000 504,000 2,426,700 0 3,607,500 764,000 5,072,500 1,927,500 313,000 0 $ 13,252,500 $ 3,425,100 $ 14,491,500 Accounts payable Long-term debt Common stock-Procise Common stockGaugeRite Retained earnings 12/31/21 Total liabilities and equity $ (220,000) $ (410,000) (3,312,500) (829,000) (5,150,000) (1,076,000) (4,570,000) (1,110,100) $(13,252,500) $ (3,425,100) $ 0 $ 0 $ 14,491,500