On January 1, 2023, 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, 2024, 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 2024 impairment loss for the entire amount of goodwill from the ChipTech acquisition.

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Fair value of consideration transferred for Chip Tech Book value of Chip Tech: Common stock and additional paid-in capital (APIC) Retained earnings Excess fair value over book value to Trademark (10-year remaining life) Existing technology (5-year remaining life) Goodwill $130,000 370,000 $ 40,000 80,000 $670,000 500,000 170,000 120,000 $ 50,000