Consolidated Balance Sheet Working Paper, Date of Acquisition, Bargain Purchase On January 1, 2016, Paxon Corporation acquired 80 percent of the outstanding common stock of the Saxon Company for $2 billon cash. The balance sheets of Paxon and Saxon immediately prior to the combination, follow (in Millions Pavon Sanon Assets Gath and recevables 55720 5 1,010 Inventory 2400 1500 Tout method investment 600 Land 100 150 Buildings and equipment 2000 1.200 51.220 552190 Liabilities and shareholders equity Current 52000 52.000 Long term debt 4.000 100 Common stock are 1.000 200 Additional paid in 2000 700 hindamine 400 1600 Total bandsholdet 17200 Several of Saxon's assets and liabilities had fair values that were different from their book values. Estimates of the fair values of these items follow. (in millions) Estimated fair value Inventory 52,000 Equity method investments 500 Land 1140 Buildings and equipment net 1.800 Long-term debt 580 The estimated fair value of the noncontrolling interest in Saxon is $400 million a. Calculate the gain on acquisition and prepare Paxon's entry to record the acquisition (in millions) When appropriate, use negative signs with your revaluation answers (left column only) Do not use negative signs with your answers in the right column Enter answers in millions $ Acquisition cost Fair value of noncontrolling interest Total Book value of Saxon $ Revaluations Inventory Equity method investments Land Buildings and equipment, net Long term debt Fair value of identifiable net assets Gain on acquisition Paxon's acquisition entry (in milions): General Journal Description Debit Credit Cash b. Prepare a working paper to consolidate the balance sheets of Paxon and Saxon at January 1, 2016. Remember to use negative signs with your credit balance answers in the Dr (Cr) colurons. Enter answers in millions. Consolidation Working Paper Accounts Taken From Books Eliminations Saxon Consolidated Balances (in millions) Dr (Cr) Dr (Cr) Debit Credit Dr (Cr) Cash and receivables $ Inventory Equity method investments Investment in Saxon Paxon $ 5 (R) eee (R) (E) (R) (R) (R) Land Buildings and equipment, net Current liabilities Long term debt Common stock par value Additional paid in capital Retained earnings Noncontrolling interest Total 5 (R) (E) (R) (E) $ - C Present the consolidated balance sheet, in good form, at the date of acquisition (in millions). Do not use negative signs with any of your answers. Enter answers in millions Consolidated Balance Sheet January 1, 2016 (in millions) Assets Cash and receivables Inventory Current assets Equity method investments Land Buildings and equipment, net Total assets Uabilities and shareholders equity Current liabilities Long term debe Total abilities Shareholders equiry Paxon shareholders equity Common stock Additional paid in capital Retained earning Total Paxon shareholders equity Noncontrolling interest January 1, 2016 (in millions) Assets Cash and receivables 5 Inventory Current assets Equity method investments Land Buildings and equipment, net Total assets $ Liabilities and shareholders' equity Current liabilities $ Long-term debt Total liabilities Shareholders' equity Paxon shareholders' equity: Common stock Additional pald.in capital Retained earnings Total Paxon shareholders' equity Noncontrolling interest Total shareholders' equity Total abilities and shareholders' equity 5 Consolidated Balance Sheet Working Paper, Date of Acquisition, Bargain Purchase On January 1, 2016, Paxon Corporation acquired 80 percent of the outstanding common stock of the Saxon Company for $2 billon cash. The balance sheets of Paxon and Saxon immediately prior to the combination, follow (in Millions Pavon Sanon Assets Gath and recevables 55720 5 1,010 Inventory 2400 1500 Tout method investment 600 Land 100 150 Buildings and equipment 2000 1.200 51.220 552190 Liabilities and shareholders equity Current 52000 52.000 Long term debt 4.000 100 Common stock are 1.000 200 Additional paid in 2000 700 hindamine 400 1600 Total bandsholdet 17200 Several of Saxon's assets and liabilities had fair values that were different from their book values. Estimates of the fair values of these items follow. (in millions) Estimated fair value Inventory 52,000 Equity method investments 500 Land 1140 Buildings and equipment net 1.800 Long-term debt 580 The estimated fair value of the noncontrolling interest in Saxon is $400 million a. Calculate the gain on acquisition and prepare Paxon's entry to record the acquisition (in millions) When appropriate, use negative signs with your revaluation answers (left column only) Do not use negative signs with your answers in the right column Enter answers in millions $ Acquisition cost Fair value of noncontrolling interest Total Book value of Saxon $ Revaluations Inventory Equity method investments Land Buildings and equipment, net Long term debt Fair value of identifiable net assets Gain on acquisition Paxon's acquisition entry (in milions): General Journal Description Debit Credit Cash b. Prepare a working paper to consolidate the balance sheets of Paxon and Saxon at January 1, 2016. Remember to use negative signs with your credit balance answers in the Dr (Cr) colurons. Enter answers in millions. Consolidation Working Paper Accounts Taken From Books Eliminations Saxon Consolidated Balances (in millions) Dr (Cr) Dr (Cr) Debit Credit Dr (Cr) Cash and receivables $ Inventory Equity method investments Investment in Saxon Paxon $ 5 (R) eee (R) (E) (R) (R) (R) Land Buildings and equipment, net Current liabilities Long term debt Common stock par value Additional paid in capital Retained earnings Noncontrolling interest Total 5 (R) (E) (R) (E) $ - C Present the consolidated balance sheet, in good form, at the date of acquisition (in millions). Do not use negative signs with any of your answers. Enter answers in millions Consolidated Balance Sheet January 1, 2016 (in millions) Assets Cash and receivables Inventory Current assets Equity method investments Land Buildings and equipment, net Total assets Uabilities and shareholders equity Current liabilities Long term debe Total abilities Shareholders equiry Paxon shareholders equity Common stock Additional paid in capital Retained earning Total Paxon shareholders equity Noncontrolling interest January 1, 2016 (in millions) Assets Cash and receivables 5 Inventory Current assets Equity method investments Land Buildings and equipment, net Total assets $ Liabilities and shareholders' equity Current liabilities $ Long-term debt Total liabilities Shareholders' equity Paxon shareholders' equity: Common stock Additional pald.in capital Retained earnings Total Paxon shareholders' equity Noncontrolling interest Total shareholders' equity Total abilities and shareholders' equity 5