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On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of GaugeRite Corporation for $2,016,500 cash. On the acquisition date, GaugeRite had the following balance sheet:

Cash	$	83,000		Accounts payable	$	169,000
Accounts receivable		192,000		Long-term debt		1,028,000
Land		721,000		Common stock		1,065,000
Equipment (net)		1,937,000		Retained earnings		671,000
	$	2,933,000			$	2,933,000

At the acquisition date, the following allocation was prepared:

Fair value of consideration transferred				$	2,016,500
Book value acquired					1,736,000
Excess fair value over book value					280,500
To in-process research and development	$	52,500
To equipment (8-year remaining life)		80,000			132,500
To goodwill (indefinite life)				$	148,000

Although at acquisition date Procise had expected $52,500 in future benefits from GaugeRites in-process research and development project, by the end of 2017, it was apparent that the research project 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.

	Procise				GaugeRite
Sales	$	(3,651,000)			$	(1,106,500)
Cost of goods sold		1,717,500				712,500
Depreciation expense		338,000				138,000
Other operating expenses		225,000				34,000
Subsidiary income		(212,000)				0
Net income	$	(1,582,500)			$	(222,000)
Retained earnings 1/1/18	$	(3,007,500)			$	(918,000)
Net income		(1,582,500)				(222,000)
Dividends declared		100,000				26,625
Retained earnings 12/31/18	$	(4,490,000)			$	(1,113,375)
Cash	$	45,125			$	\84,375\
Accounts receivable		874,000				234,000
Inventory		964,000				607,000
Investment in GaugeRite		2,386,375				0
Land		3,302,500				745,000
Equipment (net)		5,230,000				1,820,000
Goodwill		326,000				0
Total assets	$	13,128,000			$	3,490,375
Accounts payable	$	(243,000)			$	(468,000)
Long-term debt	$	(3,245,000)			$	(844,000)
Common stock		(5,150,000)				(1,065,000)
Retained earnings 12/31/18		(4,490,000)				(1,113,375)
Total liabilities and equity	$	(13,128,000)			$	(3,490,375)

A. Prepare a consolidated worksheet for Procise and GaugeRite as of December 31, 2018. (Answer is not complete)

Procise and Subidiary Gae Rite Consolidated Worksheet for the year ended December 31, 2018 Consolidation Entries 12/31/18 12/31/18 Consolidated Debit Credit Accounts Totals Procise GaugeRite (4,757,500) (3,651,000) (1,106,500) Sales Cost of goods sold 1,717,500 712,500 2,430,000 Depreciation expense 486,000 259,000 338,000 138,000 10,000 Other operating expenses 225,000 34,000 Subsidiary income (212,000) 0 212,000 (1,582,500) $ 222,000 (1,582,500) Net Income (3,007,500) $ (3,007,500) Retained earnings 1/1/18 (918,000) 918,000 |(1,582,500) Net Income (222,000) (1,582,500) 100,000 Dividends declared 26,625 26,625 100,000 (4,490,000) $ (1,113,375) (4,490,000) Retained earnings 12/31/18 Cash 45,125 84,375 129,500 $ Accounts receivable 234,000 1,108,000 874,000 Inventory 964,000 607,000 1,571,000 Investment in GaugeRite 2,386,375 26,625 Land 745,000 3,302,500 4,047,500 Equipment (net) 1,820,000 70,000 5,230,000 10,000 7,110,000 474,000 Goodwill 326,000 10 148,000 13,128,000 3,490,375 $14,440,000 Total assets Accounts payable (243,000) (468,000) (711,000) Long-term debt (3,245,000) (844,000) (4,089,000) (5,150,000) (5,150,000) Common stock-Procise Common stock-GaugeRite (1,065,000) 1,065,000 0 Retained earnings 12/31/18 (4,490,000) (4,490,000) (1,113,375) $(13,128,000) $ (3,490,375) $ 2,449,625 $ 36,625 $(14,440,000) Total liabilities and equity

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