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.
