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:
Using Excel, compute consolidated balances for Innovus and ChipTech by completing the provided worksheet.
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:
The December 31, 2021, trial balances for the parent and subsidiary follow (there were no intra-entity payables on that date):
Using Excel, compute consolidated balances for Innovus and ChipTech by completing the provided worksheet.
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Sheet1
| Consolidation Entries | ||||||
| Innovus | ChipTech | Debit | Credit | Consolidated | ||
| Revenues | (9 | 90,000 | (210,000) | |||
| Cost of Goods Sold | 500,000 | |||||
| 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 | (1,555,000) | ( | 450,000 | |||
| Dividends Declared | 250,000 | |||||
| Retained Earnings 12/31 | (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 | |||||
| Existing Technology | 45,000 | |||||
| Goodwill | ||||||
| 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) | ||||
| Total Liabilities and Equity | (3,080,000) | (725,000) |
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