On January 1, 2017, Innovus, Inc., acquired 100 percent of the common stock of ChipTech Company for
Question:
The December 31, 2018, trial balances for the parent and subsidiary follow (there were no intraentity 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 2018 impairment loss for the entire amount of goodwill from the ChipTech acquisition.
Transcribed Image Text:
$670,000 Fair value of consideration transferred for ChipTech Book value of ChipTech nstock and Additional Paid-In Capital (APIC $130,000 370,000 Retained earnings 500,000 Excess fair value over book value to Trademark (10-year remaining life) Existing technology (5-year remaining life) Goodwill $ 40,000 80,000 120,000 500) ChipTech $ (210,000) 90,000 5,000 18,000 Innovus Revenues Cost of goods sold Depreciation expense Amortization expense Dividend income $ (990,000) 500,000 100,000 55,000 40 Net income $ (375,000) $ (97,000 $ (1,555,000) (375,000) 250,000 $ (450,000) (97,000) 40,000 Retained earnings 1/1/18 Net income Dividends declared Retained earnings 12/31/18 S (1,680 $ 960,000 670,000 765,000 235,000 0- 450,000 $3,080,000 $ 355,000 Current assets Investment in ChipTech Equipment (net) Trademark Existing technology Goodwill 225,000 100,000 45,000 Total assets $ 725,000 Liabilities Common stock Additional paid-in capital Retained earnings 12/31/18 $ (780,000) (500,000) (120,000) (88,000) (100,000) (30,000) 07,000) 1,680 $(3,080 Total liabilities and equity $(725
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a Innovus employs initial value method to account for ChipTech Consolidated Entries Innovus ChipTech Debit Credit Consolidated Revenues 990000 210000 ...View the full answer
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Related Book For
Fundamentals of Advanced Accounting
ISBN: 978-1259722639
7th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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