Refer to the information in P5.4. Now assume it is December 31,2014, two years after the acquisition. The trial balances of Paxon and Saxon at December 31,2014, appear below:

Required
a. Prepare a schedule computing equity in net income of Saxon for 2014, reported on Paxon's books, and the noncontrolling interest in income for 2014, to be reported on the consolidated income statement for 2014.
b. Prepare a working paper to consolidate the trial balances of Paxon and Saxon at December 31,2014.

Transcribed Image Text:

Dr (Cr) (in millions) Paxon Saxon $ 3,000 850 950 2,500 2,063.9 650 5,905 Inventory.. 250 1,440 (2,500) (1,000) (800) (100) (350) 3,022.2) (1,090 50 35,000) (12,000) Land . Buildings and equipment, net … … 6,000) (500) (1,200) Additional paid-in capital. Retained earnings, January 1. Dividends.. 500 (146.7) Cost of goods sold.... 30,000 9,500 60 40 2,200 450 300 Interest expense... Other operating expenses 3.000 Totals