Assume that P. Diddy Co. (aka Puff Daddy) acquires 75% of Snoop Co.'s 100,000 outstanding voting shares on January 1, 2020 for $8.50 per share or a total of $637,500 cash consideration. Further assume that the 25% noncontrolling interest shares traded both before and after the acquisition date at an average of $8.50 per share. What is the total FV of Snoop?

Step 1: Calculate the total fair value of Snoop to be used initially in consolidation and determine if a control premium was paid by P. Diddy Co. (5 pts)
Consideration Transferred by P. Diddy
Noncontrolling interest fair value
Snoop's acquisition date fair value	$ -
Did P. Diddy pay a control premium?
The book values as well as the appraised fair values of Snoop's accounts follow:
	Book Values 1/1/20	Fair Values 1/1/20		Difference
Current Assets	420,000	420,000		-
Trademarks (indefinite life)	240,000	300,000		60,000
Patented technology (20 yr remaining life)	460,000	500,000		40,000
Equipment (10 year remaining life)	90,000	80,000		(10,000)
Lont-term Liabilities (8 years to maturity)	(500,000)	(480,000)		20,000
Net book value	$ 710,000	$ 820,000		$ 110,000
Common Stock	(250,000)
Retained earnings, 1/1/20	(460,000)
Step 2: Perform an Allocation of Purchase Price and identify if Pauly D should recognize Goodwill or a Gain on Bargain Purchase (10 pts)