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:

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 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.

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

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 balance sheet?