On January 1, 2020, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,099,750 cash. On the acquisition date, GaugeRite had the following balance sheet: Cash Accounts receivable Land $ 112,000 128,000 759,000 1,966,000 $ 2,965,000 Accounts payable Long-term debt Common stock Retained earnings Total liabilities and equity $ 215,000 950,000 1,098,000 702,000 $ 2,965,000 Equipment (net) Total assets At the acquisition date, the following allocation was prepared: $ 2,099,750 1,800,000 299,750 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) $ 45,750 116,000 161,750 138,000 Although at acquisition date Procise had expected $45,750 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 $(1,225,750) 790,000 145,000 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 $ (3,934,500) 1,807,500 335,000 224,000 (239,500) $ (1,807,500) $ (3,027,500) (1,807,500) 300,000 $ (4,535,000) $ 36,450 881,000 983,000 2,449,550 3,170,000 5,190,000 307,000 $ 13,017,000 $ (232,000) (3,100,000) (5,150,000) (4,535,000) $(13,017,000) $ (254,000) $ (900,000) (254,000) 27,450 $(1,126,550) $ 46,050 198,000 704,000 719,000 1,917,500 0 $ 3,584,550 $ (486,000) (874,000) (1,098, 000) (1,126,550) $ (3,584,550) 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. On January 1, 2020, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,099,750 cash. On the acquisition date, GaugeRite had the following balance sheet: Cash Accounts receivable Land $ 112,000 128,000 759,000 1,966,000 $ 2,965,000 Accounts payable Long-term debt Common stock Retained earnings Total liabilities and equity $ 215,000 950,000 1,098,000 702,000 $ 2,965,000 Equipment (net) Total assets At the acquisition date, the following allocation was prepared: $ 2,099,750 1,800,000 299,750 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) $ 45,750 116,000 161,750 138,000 Although at acquisition date Procise had expected $45,750 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 $(1,225,750) 790,000 145,000 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 $ (3,934,500) 1,807,500 335,000 224,000 (239,500) $ (1,807,500) $ (3,027,500) (1,807,500) 300,000 $ (4,535,000) $ 36,450 881,000 983,000 2,449,550 3,170,000 5,190,000 307,000 $ 13,017,000 $ (232,000) (3,100,000) (5,150,000) (4,535,000) $(13,017,000) $ (254,000) $ (900,000) (254,000) 27,450 $(1,126,550) $ 46,050 198,000 704,000 719,000 1,917,500 0 $ 3,584,550 $ (486,000) (874,000) (1,098, 000) (1,126,550) $ (3,584,550) 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