Hoyle, Schaefer and Doupnik Chapter4 Problem 25

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

(See Table Below)

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.

1) What is the goodwill at the acquisition date? (Provide calculation here)

2) What is the proportion of goodwill assigned to NCI? (Provide calculation here)

	Book Values	Fair Values	Remaining Life(Years)
Current Assets	$80,000	$80,000
Building& Equipment	1,250,000	1,000,000	5
Trademarks	700,000	900,000	10
Patented Technology	940,000	2,000,000	4
Total	$2,970,000
Current Liabilities	$180,000	$180,000
Long-term Notes Payable	1,500,000	1,500,000
Common Stock	50,000
Additional Paid-in Capital	500,000
Retained Earnings	740,000
Total	$2,970,000