On December 31, 2012, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for

Question:

On December 31, 2012, Paxon acquired all of the outstanding of Saxon Company for $1.8 billion cash. Paxon uses the complete equity method to report its investment. The trial balances of Paxon and Saxon at December 31, 2013, are shown below:

On December 31, 2012, Paxon Corporation acquired all of the

Several of Saxon's assets and liabilities had fair values different from their book values at the acquisition date, as follows:

Required
a. Prepare a schedule to compute equity in net income of Saxon for 2013, and the December 31, 2013, balance for the Investment in Saxon, as reported on Paxon's books.
b. Use a working paper to consolidate the trial balances of Paxon and Saxon at December 31,2013.
c. Prepare the consolidated balance sheet and statement of income and retained earnings at December 31, 2013.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
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