On January 1, 2020, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,051,050 cash. On the acquisition date, GaugeRite had the following balance sheet: Cash Accounts receivable Land Equipment (net) Total assets $ 37,000 113,000 768,000 1,954,000 $ 2,872,000 Accounts payable Long-term debt Common stock Retained earnings Total liabilities and equity $ 180,000 940,000 1,078,000 674,000 $ 2,872,000 At the acquisition date, the following allocation was prepared: $ 2,051,050 1,752,000 299,050 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) $ 62,250 96,800 159,050 140,000 $ Although at acquisition date Procise had expected $62,250 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 $(1,186,000) 717,500 134,000 33,500 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 $ (3,598,600) 1,665,000 326,000 216,500 (288,900) $ (1,680,000) $ (3,607,500) (1,680,000) 200,000 $ (4,487,500) $ 22,350 856,000 902,000 2,396,650 3,467,500 5,025,000 386,000 $ 13,055,500 $ (283,000) (3,135,000) (5,150,000) (4,487,500) $(13,055,500) $ (301,000) $ (832,000) (301,000) 26,950 $(1,106,050) $ 46,050 178,000 809,000 737,000 1,775,000 $ 3,545,050 $ (470,000) (891,000) (1,078,000) (1,106,050) $ (3,545, 050) 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 Show how Procise derived its December 31, 2021, Investment in GaugeRite a be indicated by a minus sign.) Amounts Consideration transferred 1/1/20 Investment balance 12/31/21 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 $ (3,598,600) $ (1,186,000) 1,665,000 717,500 326,000 134,000 216,500 33,500 (288,900) 0 $ (1,680,000) $ 301,000 Retained earnings 1/1/21 Net Income Dividends declared Retained earnings 12/31/21 $ (3,007,500) $ (832,000) (1,680,000) (301,000) 200,000 26,950 $ (4.487,500) $ (1,106,050) Cash Accounts receivable Inventory Investment in GaugeRite Land Equipment (net) Goodwill Total assets $ 22,350 $ 46,050 856,000 178,000 902.000 809,000 2,396,650 0 3,467,500 737,000 5,025,000 1,775,000 386,000 0 $ 13,055,500 $ 3,545,050 $ 14,416,500 Accounts payable Long-term debt Common stock-Procise Common stock-GaugeRite Retained earnings 12/31/21 Total liabilities and equity $ (283,000) $ (470,000) (3,135,000) (891,000) (5,150,000) (1,078,000) (4.487,500) (1,106,050) $(13,055,500) $ (3,545,050) $ 14,416,500