On January $1,2022,$ Paxon Corporation acquired $80$ percent of the outstanding common stock of the Saxon Company for $$1\mathrm{.}7$ billion cash. The balance sheets of Paxon and Saxon, immediately prior to the combination, follow:

$($in millions$)$ Paxon Saxon

Assets

Cash and receivables $ $2,860$ $ $720$

Inventory $1,700900$

Equity method investments $--300$

Land $650175$

Buildings and equipment, net $2,400600$

Total assets $ $7,610$ $$2,695$

Liabilities and shareholders' equity

Current liabilitiess $ $1,500$ $ $1,000$

Long$-$term debt $2,000845$

Common stock, par value $50050$

Additional paid$-$in capital $1,200200$

Retained earnings $2,410600$

Total liabilities and shareholders$$ equity $ $7,610$ $ $2,695$

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 $ $500$

Equity method investments $400$

Land $450$

Buildings and equipment, net $1,100$

In addition, Saxon had previously unrecorded identifiable intangible assets valued at $$875$ million. The estimated fair value of the noncontrolling interest in Saxon is $$350$ million.

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.

Acquisition cost Answer

$0$

Fair value of noncontrolling interest Answer

$0$

Total Answer

$0$

Book value of Saxon Answer

$0$

Revaluations:

Inventory Answer

$0$

Equity method investments Answer

$0$

Land Answer

$0$

Buildings and equipment, net Answer

$0$

Identifiable intangibles Answer

$0$

Fair value of identifiable net assets Answer

$0$

Gain on acquisition Answer

$0$

Paxon$$s acquisition entry $($in millions$)$:

General Journal

Description Debit Credit

Answer

Answer

$0$

Answer

$0$

Cash Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

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 $($Cr$)$ balance answers in the Dr $($Cr$)$ columns. Enter answers in millions.

Consolidation Working Paper

Accounts Taken From Books Eliminations

$($in millions$)$ Paxon

Dr $($Cr$)$ Saxon

Dr $($Cr$)$ Debit Credit Consolidated Balances

Dr $($Cr$)$

Cash and receivables Answer

$0$

Answer

$0$

Answer

$0$

Inventory Answer

$0$

Answer

$0$

Answer

$0$

$($R$)$ Answer

$0$

Equity investments $--$ Answer

$0$

$($R$)$ Answer

$0$

Answer

$0$

Identifiable intangible assets $----($R$)$ Answer

$0$

Answer

$0$

Investment in Saxon Answer

$0$

Answer

$0$

$($E$)$

Answer

$0$

$($R$)--$

Land Answer

$0$

Answer

$0$

$($R$)$ Answer

$0$

Answer

$0$

Buildings and equipment, net Answer

$0$

Answer

$0$

$($R$)$ Answer

$0$

Answer

$0$

Current liabilities Answer

$0$

Answer

$0$

Answer

$0$

Long$-$term debt Answer

$0$

Answer

$0$

Answer

$0$

Common stock, par value Answer

$0$

Answer

$0$

$($E$)$ Answer

$0$

Answer

$0$

Additional paid$-$in capital Answer

$0$

Answer

$0$

$($E$)$ Answer

$0$

Answer

$0$

Retained earnings Answer

$0$

Answer

$0$

$($E$)$ Answer

$0$

Answer

$0$

Noncontrolling interest $----($R$)$ Answer

$0$

Answer

$0$

$($E$)$ Answer

$0$

Total Answer

$0$

Answer

$0$

Answer

$0$

Answer

$0$

Answer

$0$

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 $1,2022$

$($in millions$)$

Assets

Cash and receivables Answer

$0$

Inventory Answer

$0$

Current assets Answer

$0$

Equity method investments Answer

$0$

Land Answer

$0$

Buildings and equipment, net Answer

$0$

Identifiable intangible assets Answer

$0$

Total assets Answer

$0$

Liabilities and shareholders$$ equity

Current liabilities Answer

$0$

Long$-$term debt Answer

$0$

Total liabilities Answer

$0$

Shareholders$$ equity

Paxon stockholders$$ equity:

Common stock Answer

$0$

Additional paid$-$in capital Answer

$0$

Retained earnings Answer

$0$

Total Paxon shareholders$$ equity Answer

$0$

Noncontrolling interest Answer

$0$

Total shareholders$$ equity Answer

$0$

Total liabilities and shareholders$$ equity Answer

$0$

Please answer all parts of the question.