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+ 5 points Problem 3-37 (Static) (LO 3-3) 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: Cash Accounts receivable Land Equipment (net) Total assets Fair value of consideration transferred Book value acquired Excess fair value over book value. At the acquisition date, the following allocation was prepared: To in-process research and development To equipment (8-year remaining life) To goodwill (indefinite life) $ 14,000 100,000 700,000 1,886,000 $2,700,000 Sales Cost of goods sold Depreciation expense Other operating expenses Subsidiary income. Net income Retained earnings 1/1/21 Net income Dividends declared Cash Accounts receivable Inventory Investment in GaugeRite Retained earnings 12/31/21 Land Equipment (net) Goodwill Although at acquisition date Procise had expected $44,000 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. Total assets Accounts payable Long-term debt. Common stock Retained earnings 12/31/21 Accounts payable Long-term debt On December 31, 2021, Procise and GaugeRite submitted the following financial statements for consolidation. There were no intra- entity payables on that date. Common stock Retained earnings. Total liabilities and equity Total liabilities and equity $ 44,000 56,000 Procise $ (3,500,000) 1,600,000 350,000 190,000 (203,000) $ (1,563,000) $ (3,000,000) (1,563,000) 200,000 $ 1,980,000 1,650,000 330,000 100,000 $ 230,000 228,000 840,000 900,000 2,257,000 3,500,000 4,785,000 290,000 $ (4,363,000) $ $ $ $ 12,800,000 $ (193,000) (3,094,000) (5,150,000) (4,363,000) $(12,800,000) GaugeRite $(1,000,000) 630,000 130,000 30,000 0 $ (210,000) $ (800,000) (210,000) 25,000 (985,000) 50,000 155,000 580,000 0 700,000 1,700,000 $ 120,000 930,000 1,000,000 650,000 $2,700,000 0 $ 3,185,000 $ (400,000) (800,000) (1,000,000) (985,000) $(3,185,000) 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. 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 X Answer is not complete. Show how Procise derived its December 31, 2021, Investment in GaugeRite account balance. (Amounts to be deducted should be indicated by a minus sign.) 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 Income 2021 Dividends declared 2021 Amortization 2021 Investment balance 12/31/21 Amounts $ 1,980,000 150,000 (44,000) 7,000 X 210,000 25,000 5 points 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 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. Input all amounts as positive values.) Accounts 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-Procise Common stock- GaugeRite Retained earnings 12/31/21 Total liabilities and equity 12/31/21 Procise $ (3,500,000) Answer is not complete. PROCISE AND SUBSIDIARY GAUGERITE Consolidated Worksheet for the year ended December 31, 2021 $ (1,000,000) 1,600,000 630,000 350,000 130,000 190.000 30,000 (203,000) 0 $(1,563,000) $ (210,000) 12/31/21 GaugeRite $ $ (3,000,000) $ (800,000) (1,563,000) (210,000) 200,000 25,000 $(4,363,000) $ (985,000) 228,000 $ 50,000 840,000 155,000 900,000 580,000 2,257,000 3,500,000 4,785,000 290,000 $ 12,800,000 (3,094,000) (5,150,000) $ 0 700,000 1,700,000 0 $ (193,000) $ (400,000) (800,000) $ 3,185,000 (1,000,000) (4,363,000) (985,000) (12,800,000) Consolidation Entries Credit