Consolidated Balance Sheet Working Paper, Bargain Purchase On December 31, 2012, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for $1.44 billion cash. The balance sheets of Paxon and Saxon, immediately prior to the combination, are shown below: Balance Sheets (in millions Paxon Saxon Assets Cash and receivables 2.28 5576 Inventory 1.00 720 Equity method investments 240 Land 520 140 Buildings and equipment net 1.920 410 Total asset 6058 2136 Liabilities and Shareholders Equity Current abilities 1.200 300 Long term debe 1600 330 Common stock para 400 0 Additional din capital 960 20 Ratindering 1.925 Total bates and shareholders guty S508812256 Several of Saxon's assets and liabilities had fair values that were different from their book values. Estimates of the fair values of these ters follow: (in millions) Inventory Equity method investments Land Buildings and equipment net Long term debit Estimated Fair Value 5000 200 336 720 232 (a) Calculate the gain on acquisition in this bargain purchase. $ 160 million (b) Prepare a working paper to consolidate the balance sheets of Paxon and Saxon at December 31, 2012, Remember to use negative signs with your credit balance answers in the Dr (Cr) columns Consolidation Working Paper Accounts Taken From Books Eliminations Consolidated Paxon Saxon Balances (in millions) Dron Dr (an Debit Credit Or(Cr) Cash and receivables 5 576 5 OX Inventory 1.380 720 (R) 800 X OX Equity method investments 240 200 XR DX Investment in Saxon 1.440 X 0X (E) OV 0 XR Land 520 140 R 336 X OX Buildings and equipment net 1.920 2014 (2) 720 x 0.X 120 X OX Buildings and equipment net Current liabilities Long term debt Common stock par value Additional paid-in capital Retained earnings Total 5 1,920 (1.200) (1.600) (400) (960) 450 R (800) (320) (80) (E) (280) (0) (676) (E) 0 232 X OX 0 X OX OX OX 1.928 X os 0 x 5 5 OX 5 0 (0) Present the consolidated balance sheet, in good form, at the date of acquisition Paxon Corporation and Subsidiary Consolidated Balance Sheet December 31, 2012 (in millions) Assets Labelties Cash and receivables 0x Current liabilities 5 Inventory 0 x Long-term debt OX Long-term investments 0x Total liabilities 0 x Land OX Buildings and equipment, net 0x Shareholders equity Common stock par value OX Additional paid-in capita OX Retained earnings OX 0X Total assets 5 0 % Total Waities and equity OX ooo Total equity