On January 1, 2010, Innovus, Inc., acquired 100 percent of the common stock of ChipTech Company for $670,000 in cash and other fair-value consideration. ChipTech€™s fair value was allocated among its net assets as follows:

The December 31, 2011, trial balances for the parent and subsidiary follow:

Required
a. Using Excel, compute consolidated balances for Innovus and ChipTech. Either use a worksheet approach or compute the balances directly.
b. Prepare a second spreadsheet that shows a 2011 impairment loss for the entire amount of goodwill from the ChipTechacquisition.

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$670,000 Fair value of consideration transferred for ChipTech Book value of ChipTech Common stock and APIC Retained earnings $130,000 30,000 500,000 170,000 Excess fair value over book value to Trademark (10-year remaining life) Existing technology (5-year remaining life) Goodwill 40,000 80,000 120,000 50,000 Innovus Retained earnings 1/1/11 Retained earnings 12B1/11 Investment in ChipTech Trademar Existing technology Additional paid-in capital Retained earnings 12/31/11 5 Total liabilities and equity