Consolidated Balance Sheet Working Paper, Date of Acquisition, Bargain Purchase On January 1, 2019 Paxon Corporation acquired 80 percent of the outstanding common stock of the Saxon Company for $1.A bilion cath. The balance sheets of Paron and Santimately pre to the combination follow in million) Pan Saron Assets 900 Land cash and receivables 520 5720 Inventary 1,700 ut med 650 175 Buildings and women 600 Tos 57.610 52695 Liabilities and shareholders equity elabos $1,500 $1,000 2.050 400 Correnon stock par vi 500 100 Nitin din Capital 1.30 350 Rendeamus 345 Totalbet and solders 362.00 2410 Several of Sason's assets and abilcies had far values that were different from the book values. Estintores of the toir values of these tems follow Estimated fair value in milions) Futy medinettments $300 250 120 100 Bunting and contrat In addition, Saxon had previously unrecorded identifiable intangible assets ued at $110 million. The estimated fair value of the cocontrolling interestin. 120 milion a Calculate the Rain on acquisition and prepare Paron's entry to record the acquisition When appropriate, se negative in with your fevaluation answers at column only Do not negative signs with your answers in the right column Entranswers in milion a. Calculate the gain on acquisition and prepare Paxon's entry to record the acquisition. 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. 1,700 X Acquisition cost Fair value of noncontrolling interest Total $ OX Book value of Saxon $ 1,295 Revaluations: Inventory (100) Equity method investments (50) Land 245 300 Buildings and equipment, net Identifiable intangibles Fair value of identifiable net assets 110 100 x $ Gain on acquisition Paxon's acquisition entry (in millions): General Journal Debit Credit Description Investment in Saxon 07 0 0 X Cash 0 Gain on acquisition Prepare a working paper to consolidate the balance sheets of Paxon and Saxon at January 1, 2019. Remember to use negative signs with your credit (Cr) balance answers in the Dr (Cr) columns. Enter answers in millions Consolidation Working Paper Accounts Taken From Books Eliminations Paxon Saxon Dr (Cr) Dr (Cr) Debit Consolidated Balances Dr (Cr) Credit $ 1,160 X $ 720 OX (in millions) Cash and receivables Inventory Equity investments Identifiable intangible assets Investment in Saxon 1,700 800 X 0X (R) 0X 250 X 0X (R) OX (R) R OX 0 x OX O X (R) 0X (R) Land 0X (R) OX X OX O X (R) 0X OX OX 0X OX OX 0X OX 0X (E) OX Buildings and equipment, net Current liabilities Long-term debt Common stock, par value Additional paid-in capital Retained earnings Noncontrolling interest Total 0 X 0X (E) 0 X OX 0X (E) 0 X OX (R) 0 X (E) 0 X $ 0 $ 0 $ 0 x $ 0 X $ 0 c. Present the consolidated balance sheet, in good form, at the date of acquisition. Do not use negative signs for any of your answers. Enter answers in millions. Consolidated Balance Sheet January 1, 2019 (in millions) Assets Cash and receivables $ 1,880 x Inventory Current assets 2,500 4,380 X Equity method investments Land 1,950 X 1,070 3,300 110 Buildings and equipment, net Identifiable intangible assets Total assets Liabilities and shareholders' equity $ 10,810 X Current liabilities $ 2,500 Long-term debt Total liabilities 2,400 4,900 600 X Shareholders' equity Paxon stockholders' equity: Common stock Additional paid-in capital Retained earnings Total Paxon shareholders' equity 1,550 X 3,760 X 5,910 x Noncontrolling interest Total shareholders' equity Total liabilities and shareholders' equity $ 0X 10,810 x
