On January 1, 2020, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $1,980,000 cash. On the acquisition date, GaugeRite had the following balance sheet:

At the acquisition date, the following allocation was prepared:

On December 31, 2021, Procise and GaugeRite submitted the following trial balances for consolidation. There were no intra-entity payables on that date.

a. Show how Procise derived its December 31, 2021, Investment in GaugeRite account balance.

b. Explain the treatment of the acquired in-process research and development.

c. Prepare a consolidated worksheet for Procise and GaugeRite as of December 31, 2021.

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$ 120,000 $ 100,000 700,000 Accounts payable. Long-term debt Cash 14,000 Accounts receivable. 930,000 Land.. Common stock 1,000,000 Equipment (net) . 1,886,000 Retained earnings.. 650,000 $2,700,000 $2,700,000