Consolidated Balance Sheet Working Paper, Bargain Purchase On January 1, 2022, Paxon Corporation acquired all of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consolidated Balance Sheet Working Paper, Bargain Purchase On January 1, 2022, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for $2 billion cash. The prior to the combination, are shown below: Paxon Saxon (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 balance answers in the Dr (Cr) columns. Consolidation Working Paper Accounts Taken From Books Eliminations Balance Sheets (in millions) Assets Cash and receivables Inventory Equity method investments Land Buildings and equipment, net Total assets $2,860 $720 1,700 900 300 650 175 2,400 600 $7,610 $2,695 Liabilities and Shareholders' Equity Current liabilities 1,500 1,000 Long-term debt 2,000 845 Common stock, par value 500 50 Additional paid-in capital 1,200 200 Retained earnings 2,410 600 Total liabilities and shareholders' equity $7,610 $2,695 Several of Saxon's assets had fair values that were different from their book values. Estimates of the fair values of these items fol (in millions) Inventory Equity method investments Land Buildings and equipment, net Estimated Fair Value $500 400 450 1,100 In addition, Saxon had previously unrecorded identifiable assets valued at $875 million. Required (a) Calculate the gain on acquisition in this bargain purchase. $ 100 million (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 balance answers in the Dr (Cr) columns. Consolidation Working Paper Accounts Taken From Books Eliminations Paxon Saxon Consolidated Balances (in millions) Dr (Cr) Cash and receivables Inventory $ 1160 $ 1700 Equity method investments Dr (Cr) 720 900 300 (R) Debit Credit Dr (Cr) $ 1880 100 (R) 2500 100 400 Investment in Saxon 1700 1700 (E) 1800 (R) + Land Buildings and equipment, net Identifiable intangibles Current liabilities Long-term debt Common stock, par value Additional paid-in capital Retained earnings Total $ $ (R) (R) (R) (E) (E) (E) $ (c) Present the consolidated balance sheet, in good form, at the date of acquisition. Paxon Corporation and Subsidiary Consolidated Balance Sheet Date of Acquisition (in millions) A Assets Cash and receivables Inventory $ Long-term investments Land Liabilities Current liabilities Long-term debt Total liabilities $ Buildings and equipment, net Identifiable intangibles Total assets $ Shareholders' equity Common stock, par value Additional paid-in capital Retained earnings Total equity Total liabilities and equity $ Consolidated Balance Sheet Working Paper, Bargain Purchase On January 1, 2022, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for $2 billion cash. The prior to the combination, are shown below: Paxon Saxon (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 balance answers in the Dr (Cr) columns. Consolidation Working Paper Accounts Taken From Books Eliminations Balance Sheets (in millions) Assets Cash and receivables Inventory Equity method investments Land Buildings and equipment, net Total assets $2,860 $720 1,700 900 300 650 175 2,400 600 $7,610 $2,695 Liabilities and Shareholders' Equity Current liabilities 1,500 1,000 Long-term debt 2,000 845 Common stock, par value 500 50 Additional paid-in capital 1,200 200 Retained earnings 2,410 600 Total liabilities and shareholders' equity $7,610 $2,695 Several of Saxon's assets had fair values that were different from their book values. Estimates of the fair values of these items fol (in millions) Inventory Equity method investments Land Buildings and equipment, net Estimated Fair Value $500 400 450 1,100 In addition, Saxon had previously unrecorded identifiable assets valued at $875 million. Required (a) Calculate the gain on acquisition in this bargain purchase. $ 100 million (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 balance answers in the Dr (Cr) columns. Consolidation Working Paper Accounts Taken From Books Eliminations Paxon Saxon Consolidated Balances (in millions) Dr (Cr) Cash and receivables Inventory $ 1160 $ 1700 Equity method investments Dr (Cr) 720 900 300 (R) Debit Credit Dr (Cr) $ 1880 100 (R) 2500 100 400 Investment in Saxon 1700 1700 (E) 1800 (R) + Land Buildings and equipment, net Identifiable intangibles Current liabilities Long-term debt Common stock, par value Additional paid-in capital Retained earnings Total $ $ (R) (R) (R) (E) (E) (E) $ (c) Present the consolidated balance sheet, in good form, at the date of acquisition. Paxon Corporation and Subsidiary Consolidated Balance Sheet Date of Acquisition (in millions) A Assets Cash and receivables Inventory $ Long-term investments Land Liabilities Current liabilities Long-term debt Total liabilities $ Buildings and equipment, net Identifiable intangibles Total assets $ Shareholders' equity Common stock, par value Additional paid-in capital Retained earnings Total equity Total liabilities and equity $
Expert Answer:
Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
Posted Date:
Students also viewed these accounting questions
-
4) Company X wants to build a new warehouse close to its core customers to increase the service level provided to them. To do so a new study must be performed. You are asked to find a suitable...
-
On December 31, 2012, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for $0.9 billion cash. Paxon uses the complete equity method to report its investment. The trial...
-
) A local firm employs 20 full-time professionals. The budgetedannual compensation per employee is $81,000. The budgeted averagechargeable time is 500 hours per client annually. All professionallab 2...
-
Reconsider Prob. 14-124. Using EES (or other) software, determine the properties of the air at the initial state. Study the effect of heating the air at constant volume until the pressure is 110 kPa....
-
In Exercises 6782, find each product. (9x + 7y) 2
-
Correlation and \(t\)-Statistics. Use the following steps to establish a relationship between the correlation coefficient and the \(t\)-statistic for the slope. a. Use algebra to check that...
-
Kopecky Industries Inc. is considering allocating a limited amount of capital investment funds among four proposals. The amount of proposed investment, estimated income from operations, and net cash...
-
What role do epigenetic mechanisms play in modulating stress susceptibility and resilience, and how can this knowledge inform the design of precision medicine approaches for stress management...
-
Chapter 26: The Aggregate Demand-Aggregate Supply Model ePage(s) 837-838 26.3. What is aggregate supply? What is the meaning of a leftward shift in the long-run aggregate supply (LRAS) curve? Click...
-
Why do funders pay much more attention to sustainability than grant writers may suspect?
-
Being an ETL specialist, what factors will you consider as top priority in making sure that the load of data is successful?
-
Julia claims that light is a particle. do you agree or disagree. justify your position . explain your redoing add supporting evidence for your argument , that light is a wave or particle.
-
What actions or verbsl directions might you do or suggest in order to make mr . heron more comfortable?
-
Does this sentence need to be cited? 02Students who studied two hours a day did 2 5 % better on the final exam?
-
Whole Foods started out in 1980 with one small store in Austin, Texas. Today it employs 54,000 employees in more than 300 stores in North America and the United Kingdom. And despite having higher...
-
Experiment: Tossing four coins Event: Getting three heads Identify the sample space of the probability experiment and determine the number of outcomes in the event. Draw a tree diagram when...
-
For each of the following sets of numbers, calculate a \(95 \%\) confidence interval for the mean ( \(\sigma\) known); before going through the steps in calculating the confidence interval, the...
-
Consider a 3 -year \(10 \%\) coupon bond. The underlying short rate of interest follows a lattice with initial value of \(R=1.15\) and then has an factor of 1.02 , a down factor of .99 , and...
-
Using the density function of the stopping time probability for a fixed \(\lambda\), find the average time to the first event over the entire interval \([0, \infty)\).
Study smarter with the SolutionInn App