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 both before and after Patterson’s acquisition.

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

	Book Values			Fair Values			Remaining Life
Current assets	$	80,000		$	80,000
Buildings and equipment		1,250,000			1,000,000		5	years
Trademarks		700,000			900,000		10	years
Patented technology		940,000			2,000,000		4	years
	$	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
	$	2,970,000

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.

	Patterson	Soriano
Revenues	$3,000,000	$1,400,000
Expenses	1,750,000	600,000

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?