On January 1, 2016, Paxon Corporation acquired 80 percent of the outstanding common stock of the Saxon Company for $3 billion cash. The balance sheets of Paxon and Saxon, immediately prior to the combination, follow:

(in millions) Paxon Saxon Assets Cash and receivables $ 8,580 $ 2,160 Inventory 5,100 2,700 Equity method investments -- 900 Land 1,950 525 Buildings and equipment, net 7,200 1,800 Total assets $ 22,830 $8,085 Liabilities and shareholders' equity Current liabilities $ 4,500 $ 3,000 Long-term debt 6,000 1,200 Common stock, par value 1,500 300 Additional paid-in capital 3,600 1,050 Retained earnings 7,230 2,535 Total liabilities and shareholders' equity $ 22,830 $ 8,085

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 $ 3,000 Equity method investments 750 Land 1,260 Buildings and equipment, net 2,700 Long-term debt 870 The estimated fair value of the non-controlling interest in Saxon is $600 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.

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) columns. Enter answers in millions.

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.