P4.5 Consolidated Balance Sheet Working Paper, Bargain Purchase (see related P3.4) On anuary 1, 2019, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for $1.7 billion cash. Paxon uses the complete equity method to report its investment. The trial balances of Paxon and Saxon at December 31, 2019, are shown below Dr (Cr) in millions) Paxon Saxon S 3,200 2,260 S 800 In 2,158 650 3,600 (2,020) (5,000) (500) (1,200) (2,410) 500 (30,000) (458) 300 1,150 (1,200) (450) (100) (350) (845) 100 (10,000) Current liabilities. Additional paid-in capital. . . Equity in net income of Saxon . . . .. .. . . . . . . . . . . (10) (100) 26,000 300 250 2,770 Cost of goods sold.... 8,000 40 25 1,600 Interest expense. Several of Saxon's assets had fair values different from their book values at the acquisition date, as follows In milllons) Falr value - Book value Inventory (FIFO) (sold in 2019) .. Equity method investments (sold in 2019) Land.... Buildings and equipment, net (20 years, straight-line). $(100) (50) 245 300 In addition, Saxon had previously unrecorded identifiable intangible assets valued at $110 million, with a 5-year life, straight-line Required a. Prepare a schedule to compute equity in net income of Saxon for 2019, and the December 31,2019 balance for Investment in Saxon, as reported on Paxon's books. Use a working paper to consolidate the trial balances of Paxon and Saxon at December 31,2019 Prepare the consolidated balance sheet at December 31, 2019, and the consolidated income state- ment for 2019 b. c