On January 1, 2014, 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, 2015, trial balances for the parent and subsidiary follow (there were no intra-entity payables on that date):

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 2015 impairment loss for the entire amount of good-will from the ChipTech acquisition.

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Fair value of consideration transferred for ChipTech Book value of ChipTech: $670,000 Common stock and Additional Paid-in Capital (APIC) Retained earnings $130,000 370,000 500,000 170,000 Excess fair value over book value to Trademark (10-year remaining life) Existing technology (5-year remaining life) Goodwil $ 40,000 80,000 120,000 50,000 InnovuS ChipTech Revenues Cost of goods sold Depreciation expense Amortization expense Dividend income S (990,000) $(210,000) 90,000 5,000 18,000 500,000 100,000 55,000 (40,000) Net income (375,000) (97,000) Retained earnings 1/1/15 5(1,555,000) (450,000) (97,000) 40,000 $(1,680,000) $(507,000) (375,000) 250,000 Net income Dividends declared Retained earnings 12/31/15 Current assets Investment in ChipTech Equipment (net) Trademark Existing technology Goodwil $960,000 355,000 670,000 765,000 235,000 225,000 100,000 45,000 450,000 Total assets Liabilities Common stock Additional paid-in capital Retained earnings 12/31/15 $3,080,000 725,000 (88,000) (500,000) (100,000) (30,000) (1,680,00O) (507,000) $(3,080,000) $(725,000) $ (780,000) (120,000) Total liabilities and equity