Consolidated Balance Sheet Working Paper, Bargain Purchase On December 31, 2012, Paxon Corporation acquired all of...
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Consolidated Balance Sheet Working Paper, Bargain Purchase On December 31, 2012, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for $1.44 billion cash. The balance sheets of Paxon and Saxon, immediately prior to the combination, are shown below: Balance Sheets (in millions) Paxon Saxon Assets Cash and receivables Inventory Equity method investments Land Buildings and equipment net Total assets Liabilities and Shareholders Equity Current abilities Long-term debt Common stock par value $2.288 $576 1.360 1.200 800 1,600 320 400 80 0960 200 1,92 676 total abilities and shareholders equity $6.088 $2.156 Additional paid in capital Retained earrings 720 240 520 140 1.920 410 6.088 2156 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 $800 200 336 Inventory Equity method investments Land Buildings and equipment net Long-term debt (a) Calculate the gain on acquisition in this bargain purchase. $ 160 million (b) Prepare a working paper to consolidate the balance sheets of Paxon and Saxon at December 31, 2012. Remember to use negative signs with your credit balance answers in the Dr (Cr) columns. Consolidation Working Paper (in millions) Cash and receivables Inventory Equity method investments Investment in Saxon Land Buildings and equipment net Accounts Taken From Books S Paxon Dr (Cr) 848 ✔S 720 232 1.360✔ 1.440 x 520 1,920 Saxon Dr (Cr) 576 720 (R) 240 140 480 (R) (R) Eliminations Debit 800 x 336 x 720 x Credit 200 x (R) 0X (E) 0X (R) Consolidated Balances Dr (Cr) $ 0.x 0x 0x 10 BATOR oo xx Buildings and equipment net Current liabilities Long-term debt Common stock par value Additional paid-in capital Retained earnings Total Assets Cash and receivables Inventory Long-term investments Land Buildings and equipment, net Total assets 1,920 (1.200)✓ (1,600) 5 (400)✓ (960)✓ 1,928 x OS 480 (K) (800)✓ (320) (R) (80) (E) (E) (E) (280) (676) 0✔ (c) Present the consolidated balance sheet, in good form, at the date of acquisition. Paxon Corporation and Subsidiary Consolidated Balance Sheet December 31, 2012 (in millions) $ Liabilities 0x Current liabilities. 0x Long-term debt 0x Total liabilities 0x 0x Shareholders equity Common stock par value Additional paid-in capital Retained earnings $ /20 x Total equity 0x Total liabilities and equity 5 232 x 0x 0x 0x 0x5 0x ooooo 0x 0x 0x 0x 0x 5 OX 0x 0x 0x 0.x 0x 0✔ Consolidated Balance Sheet Working Paper, Bargain Purchase On December 31, 2012, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for $1.44 billion cash. The balance sheets of Paxon and Saxon, immediately prior to the combination, are shown below: Balance Sheets (in millions) Paxon Saxon Assets Cash and receivables Inventory Equity method investments Land Buildings and equipment net Total assets Liabilities and Shareholders Equity Current abilities Long-term debt Common stock par value $2.288 $576 1.360 1.200 800 1,600 320 400 80 0960 200 1,92 676 total abilities and shareholders equity $6.088 $2.156 Additional paid in capital Retained earrings 720 240 520 140 1.920 410 6.088 2156 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 $800 200 336 Inventory Equity method investments Land Buildings and equipment net Long-term debt (a) Calculate the gain on acquisition in this bargain purchase. $ 160 million (b) Prepare a working paper to consolidate the balance sheets of Paxon and Saxon at December 31, 2012. Remember to use negative signs with your credit balance answers in the Dr (Cr) columns. Consolidation Working Paper (in millions) Cash and receivables Inventory Equity method investments Investment in Saxon Land Buildings and equipment net Accounts Taken From Books S Paxon Dr (Cr) 848 ✔S 720 232 1.360✔ 1.440 x 520 1,920 Saxon Dr (Cr) 576 720 (R) 240 140 480 (R) (R) Eliminations Debit 800 x 336 x 720 x Credit 200 x (R) 0X (E) 0X (R) Consolidated Balances Dr (Cr) $ 0.x 0x 0x 10 BATOR oo xx Buildings and equipment net Current liabilities Long-term debt Common stock par value Additional paid-in capital Retained earnings Total Assets Cash and receivables Inventory Long-term investments Land Buildings and equipment, net Total assets 1,920 (1.200)✓ (1,600) 5 (400)✓ (960)✓ 1,928 x OS 480 (K) (800)✓ (320) (R) (80) (E) (E) (E) (280) (676) 0✔ (c) Present the consolidated balance sheet, in good form, at the date of acquisition. Paxon Corporation and Subsidiary Consolidated Balance Sheet December 31, 2012 (in millions) $ Liabilities 0x Current liabilities. 0x Long-term debt 0x Total liabilities 0x 0x Shareholders equity Common stock par value Additional paid-in capital Retained earnings $ /20 x Total equity 0x Total liabilities and equity 5 232 x 0x 0x 0x 0x5 0x ooooo 0x 0x 0x 0x 0x 5 OX 0x 0x 0x 0.x 0x 0✔
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Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
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