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Show how Procise derived its December 31, 2018, Investment in GaugeRite account balance. Prepare a consolidated worksheet for Procise and GaugeRite as of December 31,
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Show how Procise derived its December 31, 2018, Investment in GaugeRite account balance.
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Prepare a consolidated worksheet for Procise and GaugeRite as of December 31, 2018.
On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,107,150 cash. On the acquisition date, Gauge Rite had the following balance sheet: Cash Accounts receivable Land Equipment (net) $ 50,000 119,000 789,000 1,962,000 $2,920,000 Accounts payable Long-term debt Common stock Retained earnings $ 169,000 976,000 1,074,000 701,000 $2,920,000 At the acquisition date, the following allocation was prepared: $ 2,107,150 1,775,000 332,150 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) $ 65, 750 122,400 188, 150 144,000 Although at acquisition date Procise had expected $65,750 in future benefits from Gauge Rite's in-process research and development proiect. by the end of 2017. it was apparent that the research proiect was a failure with no future economic benefits. On December 31, 2018, Procise and GaugeRite submitted the following trial balances for consolidation. There were no intra-entity payables on that date. Gaugerite $(1,299,000) 877,500 145,000 36,500 0 Sales Cost of goods sold Depreciation expense Other operating expenses Subsidiary income Net income Retained earnings 1/1/18 Net income Dividends declared Retained earnings 12/31/18 Cash Accounts receivable Inventory Investment in GaugeRite Land Equipment (net) Goodwill Total assets Accounts payable Long-term debt Common stock Retained earnings 12/31/18 Total liabilities and equity Procise $ (3,714,050) 1,755,000 325,000 216,250 (224,700) $ (1,642,500) $ (3,210,000) (1,642,500) 300,000 $ (4,552,500) 11,550 911,000 952,000 2,413,950 3,417,500 5,012,500 365,000 $ 13,083,500 $ (261,000) $ (3,120,000) (5,150,000) (4,552,500) $(13,083,500) $ (240,000) $ (891, 000) (240,000) 26,850 $(1,104,150) $ 71,150 225,000 416,000 792,000 1,915,000 $ 3,419, 150 $ (438,000) $ (803,000) (1,074,000) (1,104,150) $ (3,419,150) On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,107,150 cash. On the acquisition date, Gauge Rite had the following balance sheet: Cash Accounts receivable Land Equipment (net) $ 50,000 119,000 789,000 1,962,000 $2,920,000 Accounts payable Long-term debt Common stock Retained earnings $ 169,000 976,000 1,074,000 701,000 $2,920,000 At the acquisition date, the following allocation was prepared: $ 2,107,150 1,775,000 332,150 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) $ 65, 750 122,400 188, 150 144,000 Although at acquisition date Procise had expected $65,750 in future benefits from Gauge Rite's in-process research and development proiect. by the end of 2017. it was apparent that the research proiect was a failure with no future economic benefits. On December 31, 2018, Procise and GaugeRite submitted the following trial balances for consolidation. There were no intra-entity payables on that date. Gaugerite $(1,299,000) 877,500 145,000 36,500 0 Sales Cost of goods sold Depreciation expense Other operating expenses Subsidiary income Net income Retained earnings 1/1/18 Net income Dividends declared Retained earnings 12/31/18 Cash Accounts receivable Inventory Investment in GaugeRite Land Equipment (net) Goodwill Total assets Accounts payable Long-term debt Common stock Retained earnings 12/31/18 Total liabilities and equity Procise $ (3,714,050) 1,755,000 325,000 216,250 (224,700) $ (1,642,500) $ (3,210,000) (1,642,500) 300,000 $ (4,552,500) 11,550 911,000 952,000 2,413,950 3,417,500 5,012,500 365,000 $ 13,083,500 $ (261,000) $ (3,120,000) (5,150,000) (4,552,500) $(13,083,500) $ (240,000) $ (891, 000) (240,000) 26,850 $(1,104,150) $ 71,150 225,000 416,000 792,000 1,915,000 $ 3,419, 150 $ (438,000) $ (803,000) (1,074,000) (1,104,150) $ (3,419,150)
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