On January 1, 2012, 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, 2013, trial balances for the parent and subsidiary follow:

Required
a. 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 2013 impairment loss for the entire amount of goodwill 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 $130,000 370,000 500,000 170,000 120,000 Excess fair value over book value to Trademark (10-year remaining life) Existing technology (5-year remaining life) Goodwill 40,000 Retained earnings 12/31/13 Investment in ChipTech 5 3,080,000 Retained earnings 12/31/13 Total liabilities and equity