EXCEL CASE 1

On January 1, 2017, 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:

Fair value of consideration transferred for ChipTech

$670,000

Book value of ChipTech:

Common stock and Additional Paid-In Capital (APIC)

$130,000

Retained earnings

370,000

500,000

Excess fair value over book value to

170,000

Trademark (10-year remaining life)

$40,000

Existing technology (5-year remaining life)

80,000

120,000

Goodwill

$50,000

The December 31, 2018, trial balances for the parent and subsidiary follow (there were no intra-entity payables on that date):

Innovus

ChipTech

Revenues

$(990,000)

$(210,000)

Cost of goods sold

500,000

90,000

Depreciation expense

100,000

5,000

Amortization expense

55,000

18,000

Dividend income

(40,000)

-0-

Net income

$(375,000)

$(97,000)

Retained earnings 1/1/18

$(1,555,000)

$(450,000)

Net income

(375,000)

(97,000)

Dividends declared

250,000

40,000

Retained earnings 12/31/18

$(1,680,000)

$(507,000)

Current assets

$960,000

$ 355,000

Investment in ChipTech

670,000

Equipment (net)

765,000

225,000

Trademark

235,000

100,000

Existing technology

-0-

45,000

Goodwill

450,000

-0-

Total assets

$3,080,000

$725,000

Liabilities

$(780,000)

(88,000)

Common stock

(500,000)

(100,000)

Additional paid-in capital

(120,000)

(30,000)

Retained earnings 12/31/18

(1,680,000)

(507,000)

Total liabilities and equity

$(3,080,000)

$(725,000)

Required

1. Using Excel, compute consolidated balances for Innovus and ChipTech. Either use a worksheet approach or compute the balances directly.
2. Prepare a second spreadsheet that shows a 2018 impairment loss for the entire amount of goodwill from the ChipTech acquisition.