On December 31, 2012, Paxon Corporation acquired 80 percent of the outstanding common stock of the Saxon Company for $1 billion cash. The balance sheets of Paxon and Saxon, immediately prior to the combination, are shown below:

The estimated fair value of the noncontrolling interest in Saxon is $200 million.
Required
a. Calculate the gain on acquisition and prepare Paxon's entry to record the acquisition.
b. Prepare a working paper to consolidate the balance sheets of Paxon and Saxon at December 31,2012.
c. Prepare a formal consolidated balance sheet for Paxon and Saxon at December 31,2012.

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(in millions) Assets Cash and receivables.... Inventory. Paxon Saxon $2,860 720 1,700 900 -300 650 175 Land. Buildings and equipment..$3,400 1.000) 2,400600 n) net $7,610 $2,695 (in millions) Paxon Saxon Liabilities and Stockholders' Equity Current liabilities Long-term debt.. Common stock, par value Additional paid-in capital.. $1,500 $1,000 2,000 400 500 100 1,200 350 2,410 845 $7.610 $2,695 Total liabilities and stockholders' equity.* (in millions) Estimated Fair Value inventory Long-term marketable securities (held-to-maturity portfolio) ·…·… . . Land Buildings and equipment, net , …···.. …·.. , , , , , , , . . . . . .. . . " Long-term debt $1,000 250 420 900 290 .. .