On January 1, 2022, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for $2 billion cash. The prior to the combination, are shown below: Balance Sheets (in millions) Paxon Saxon Assets Cash and receivables Inventory Equity method investments Land Buildings and equipment, net Total assets Liabilities and Shareholders' Equity Current liabilities Long-term debt Common stock, par value Additional paid-in capital Retained earnings $2,860 $720 1,700 900 - 300 650 175 2,400 600 $7,610 $2,695 1,500 1,000 2,000 845 500 50 1,200 200 2,410 600 Total liabilities and shareholders' equity $7,610 $2,695 Several of Saxon's assets had fair values that were different from their book values. Estimates of the fair values of these items fol Estimated Fair Value (in millions) Inventory Equity method investments Land Buildings and equipment, net $500 400 450 1,100 In addition, Saxon had previously unrecorded identifiable assets valued at $875 million. Required (a) Calculate the gain on acquisition in this bargain purchase. $ 100 million (b) Prepare a working paper to consolidate the balance sheets of Paxon and Saxon at January 1, 2022. 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) Dr (Cr) Dr (Cr) Debit Credit Dr (Cr) Cash and receivables $ 1160 $ 720 $ 1880 Inventory 1700 900 100 (R) 2500 Equity method investments Investment in Saxon 300 (R) 100 400 1700 1700 (E) 1800 (R) Land Buildings and equipment, net Identifiable intangibles Current liabilities Long-term debt Common stock, par value Additional paid-in capital Retained earnings Total $ - (R) (R) (R) (E) (E) (E) $ $ (c) Present the consolidated balance sheet, in good form, at the date of acquisition. Paxon Corporation and Subsidiary Consolidated Balance Sheet Date of Acquisition (in millions) Assets Cash and receivables $ Inventory Long-term investments Land Buildings and equipment, net Identifiable intangibles Total assets $ Liabilities Current liabilities $ Long-term debt Total liabilities Shareholders' equity Common stock, par value Additional paid-in capital Retained earnings Total equity Total liabilities and equity $