On January 1, Patterson Corporation acquired 80 percent of the 100,000 outstanding voting shares of Soriano, Inc., in exchange for $31.25 per share cash. The remaining 20 percent of Soriano€™s shares continued to trade for $30.00 both before and after Patterson€™s acquisition.
At January 1, Soriano€™s book and fair values were as follows:

In addition, Patterson assigned a $600,000 value to certain unpatented technologies recently developed by Soriano. These technologies were estimated to have a 3-year remaining life.
During the year, Soriano paid a $30,000 dividend to its shareholders. The companies reported the following revenues and expenses from their separate operations for the year ending December 31.

a. What total value should Patterson assign to its Soriano acquisition in its January 1 consolidated balance sheet?
b. What valuation principle should Patterson use to report each of Soriano€™s identifiable assets and liabilities in its January 1 consolidated balance sheet?
c. For years subsequent to acquisition, how will Soriano€™s identifiable assets and liabilities be valued in Patterson€™s consolidated reports?
d. How much goodwill resulted from Patterson€™s acquisition of Soriano?
e. What is the consolidated net income for the year and what amounts are allocated to the controlling and noncontrolling interests?
f. What is the noncontrolling interest amount reported in the December 31 consolidated balance sheet?
g. Assume instead that, based on its share prices, Soriano€™s January 1 total fair value was assessed at $2,250,000. How would the reported amounts for Soriano€™s assets change on Patterson€™s acquisition-date consolidated balancesheet?

Book Values 80,000 1,250,000 700,000 Falr Values Remalning Life Current assets Buildings and equipment 80,000 900,000 940,000 2,000,000 5 years 10 years 4 years Patented technology 2,970,000 180,000 Current liabilities Long-term notes payable Common stock Additional paid-in capital Retained earnings 180,000 1,500,000 500,000 50,000 500,000 740,000 2,970,000 Patterson Sorlano Revenues Expenses 3,000,000 4,000 600,000 . 1.750,000