On January $1,2023,$ Palka, Incorporated, acquired $70$ percent of the outstanding shares of Sellinger Company for $$1,141,000$ in cash. The price paid was proportionate to Sellinger$$s total fair value, although at the acquisition date, Sellinger had a total book value of $$1,380,000.$ All assets acquired and liabilities assumed had fair values equal to book values except for a patent $($six$-$year remaining life$)$ that was undervalued on Sellinger$$s accounting records by $$240,000.$ On January $1,2024,$ Palka acquired an additional $25$ percent common stock equity interest in Sellinger Company for $$415,000$ in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger.

During the two years following the acquisition, Sellinger reported the following net income and dividends:

Items$20232024$Net income$ $340,000$$ $440,000$Dividends declared$150,000180,000$

Required:

Show Palka$$s journal entry to record its January $1,2024,$ acquisition of an additional $25$ percent ownership of Sellinger Company shares.

Prepare a schedule showing Palka$$s December $31,2024,$ equity method balance for its Investment in Sellinger account.

At January $1,$ Soriano$$s book and fair values were as follows:

ItemsBook ValuesFair ValuesRemaining LifeCurrent assets$ $80,000$$ $80,0000$Buildings and equipment$1,250,0001,000,0005$yearsTrademarks$700,000900,00010$yearsPatented technology$940,0002,000,0004$years$$$ $2,970,00000$Current liabilities$ $180,000$$ $180,0000$Long$-$term notes payable$1,500,0001,500,0000$Common stock$50,00000$Additional paid$-$in capital$500,00000$Retained earnings$740,00000$$ $2,970,00000$

In addition, Patterson assigned a $$600,000$ value to certain unpatented technologies recently developed by Soriano. These technologies were estimated to have a three$-$year remaining life.

During the year, Soriano declared a $$30,000$ dividend for its shareholders. The companies reported the following revenues and expenses from their separate operations for the year ending December $31.$

ItemsPattersonSorianoRevenues$ $3,000,000$$ $1,400,000$Expenses$1,750,000600,000$

Required:

What amount should Patterson recognize as the total value of the acquisition in its January $1$ consolidated balance sheet?

What valuation principle should Patterson use to report each of Soriano$$s identifiable assets and liabilities in its January $1$ consolidated balance sheet?

How much goodwill resulted from Patterson$$s acquisition of Soriano?

What is the consolidated net income for the year and what amounts are allocated to the controlling and noncontrolling interests?

What is the noncontrolling interest amount reported in the December $31$ consolidated balance sheet?

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$$s net assets change on Patterson$$s acquisition$-$date consolidated balance sheet?