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On January 1, 2020, 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 Chip Tech: Common stock and Additional Paid-In Capital (APIC) Retained earnings $130,000 370,000 500,000 Excess fair value over book value to 170,000 Trademark (10-year remaining life) $ 40,000 80,000 120,000 Existing technology (5-year remaining life) Goodwill $50,000 The December 31, 2021, trial balances for the parent and subsidiary follow (there were no intra-entity payables on that date): Innovus ChipTech Revenues $ (990,000) Cost of goods sold 500,000 $(210,000) 90.000 5.000 Depreciation expense 100.000 Amortization expense 55,000 15,000 -0- Dividend income (40,000) Net income $ (375.000) $ (97.000) Retained earnings 1/1/21 $(1,555,000) $(450,000) Net income (375.000) (97,000) Dividends declared 250,000 40,000 Retained earnings 12/31/21 $(1.680.000) $(507,000) Current assets $ 960,000 $ 355,000 Investment in Chip Tech 670,000 765,000 Equipment (net) 225,000 Trademark 235,000 100,000 Existing technology 45.000 -0- 450,000 Goodwill -0- Total assets $ 3,050,000 $ 725,000 - ($8,000) Liabilities $ (780,000) Common stock (500,000) (100.000) Additional paid-in capital (120,000) (30,000) Retained earnings 12/31/21 (1.680,000) (507,000) Total liabilities and equity $(3.080.000) $(725.000) Using Excel, compute consolidated balances for Innovus and ChipTech by completing the provided worksheet. The Excel Template can be accessed by clicking this link. م

On January 1, 2020, 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 Chip Tech: Common stock and Additional Paid-In Capital (APIC) Retained earnings $130,000 370,000 500,000 Excess fair value over book value to 170,000 Trademark (10-year remaining life) $ 40,000 80,000 120,000 Existing technology (5-year remaining life) Goodwill $50,000 The December 31, 2021, trial balances for the parent and subsidiary follow (there were no intra-entity payables on that date): Innovus ChipTech Revenues $ (990,000) Cost of goods sold 500,000 $(210,000) 90.000 5.000 Depreciation expense 100.000 Amortization expense 55,000 15,000 -0- Dividend income (40,000) Net income $ (375.000) $ (97.000) Retained earnings 1/1/21 $(1,555,000) $(450,000) Net income (375.000) (97,000) Dividends declared 250,000 40,000 Retained earnings 12/31/21 $(1.680.000) $(507,000) Current assets $ 960,000 $ 355,000 Investment in Chip Tech 670,000 765,000 Equipment (net) 225,000 Trademark 235,000 100,000 Existing technology 45.000 -0- 450,000 Goodwill -0- Total assets $ 3,050,000 $ 725,000 - ($8,000) Liabilities $ (780,000) Common stock (500,000) (100.000) Additional paid-in capital (120,000) (30,000) Retained earnings 12/31/21 (1.680,000) (507,000) Total liabilities and equity $(3.080.000) $(725.000) Using Excel, compute consolidated balances for Innovus and ChipTech by completing the provided worksheet. The Excel Template can be accessed by clicking this link. م

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 1, 2020, Innovus, Inc., acquired 100 percent of the common stock of ChipTech Company for $670,000 in cash and other fair-value consideration. Chip Tech'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) Retained earnings $130,000 370,000 500,000 170,000 Excess fair value over book value to Trademark (10-year remaining life) $ 40,000 80,000 120,000 Existing technology (5-year remaining life) Goodwill $ 50,000 The December 31, 2021, trial balances for the parent and subsidiary follow (there were no intra-entity payables on that date): Innovus Chip Tech $(210,000) Revenues S (990,000) 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) $(450,000) Retained earnings 1/1/21 Net income $(1,555,000) (375,000) 250,000 (97,000) 40,000 Dividends declared Retained earnings 12/31/21 $(1,680,000) $(507,000) Current assets $ 960,000 $ 355,000 Investment in Chip Tech 670,000 Equipment (net) 765,000 225,000 Trademark 235,000 100,000 Existing technology 45,000 -0- 450,000 Goodwill -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) (507.000) Retained earnings 12/31/21 (1,680,000) Total liabilities and equity $(3.080,000) $(725,000) Using Excel, compute consolidated balances for Innovus and ChipTech by completing the provided worksheet. The Excel Template can be accessed by clicking this link.
Transcribed Image Text:On January 1, 2020, Innovus, Inc., acquired 100 percent of the common stock of ChipTech Company for $670,000 in cash and other fair-value consideration. Chip Tech'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) Retained earnings $130,000 370,000 500,000 170,000 Excess fair value over book value to Trademark (10-year remaining life) $ 40,000 80,000 120,000 Existing technology (5-year remaining life) Goodwill $ 50,000 The December 31, 2021, trial balances for the parent and subsidiary follow (there were no intra-entity payables on that date): Innovus Chip Tech $(210,000) Revenues S (990,000) 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) $(450,000) Retained earnings 1/1/21 Net income $(1,555,000) (375,000) 250,000 (97,000) 40,000 Dividends declared Retained earnings 12/31/21 $(1,680,000) $(507,000) Current assets $ 960,000 $ 355,000 Investment in Chip Tech 670,000 Equipment (net) 765,000 225,000 Trademark 235,000 100,000 Existing technology 45,000 -0- 450,000 Goodwill -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) (507.000) Retained earnings 12/31/21 (1,680,000) Total liabilities and equity $(3.080,000) $(725,000) Using Excel, compute consolidated balances for Innovus and ChipTech by completing the provided worksheet. The Excel Template can be accessed by clicking this link.
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