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Saxton Corporation purchases all of Taylor Company's assets and liabilities on January 1, 2013, for $60 million in cash. At the date of acquisition, Taylor's reported assets consist of current assets of $50 million and plant and equipment of $250 million. It reports current liabilities of $80 million and long-term debt of $200 million. Investigation reveals that Taylor's plant and equipment is overvalued by $9 million and it has an unreported customer database valued at $2.5 million.

a. Prepare the necessary journal entry on Saxton's books to record its acquisition of Taylor on January 1, 2013.

Enter your answers in thousands. For example, $1 million = $1,000 or $500,000 = $500.

General Journal
Description	Debit	Credit
Current assets	Answer	Answer
Plant and equipment	Answer	Answer
Customer database	Answer	Answer
AnswerGoodwillCashInvestment in TaylorEquity in net income of TaylorRetained earnings	Answer	Answer
Current liabilities	Answer	Answer
Long-term debt	Answer	Answer
AnswerGoodwillCashInvestment in TaylorEquity in net income of TaylorRetained earnings	Answer	Answer

b. Assume that Saxton purchases all of Taylor's voting stock on January 1, 2013, for $60 million in cash. Prepare the necessary journal entry on Saxton's books to record the acquisition.

Enter your answers in thousands. For example, $1 million = $1,000 or $500,000 = $500.

General Journal
Description	Debit	Credit
AnswerGoodwillCashInvestment in TaylorEquity in net income of TaylorRetained earnings	Answer	Answer
AnswerGoodwillCashInvestment in TaylorEquity in net income of TaylorRetained earnings	Answer	Answer

Saxton Corporation purchases all of Taylor Company's assets and liabilities on January 1, 2013, for $60 million in cash. At the date of acquisition, Taylor's reported assets consist of current assets of $50 million and plant and equipment of $250 million. It reports current liabilities of 580 million and long-term debt of $200 million. Investigation reveals that Taylor's plant and equipment is overvalued by $9 million and it has an unreported customer database valued at $2.5 million. a. Prepare the necessary journal entry on Saxton's books to record its acquisition of Taylor on January 1, 2013. Enter your answers in thousands. For example, 51 million = $1,000 or $500,000 = $500. General Journal Description Debit Credit Current assets Plant and equipment Customer database 0 0 Current liabilities 0 0 Long term deb 0 0 . 0 D b. Assume that Saxton purchases all of Taylor's voting stock on January 1, 2013, for $60 million in cash. Prepare the necessary journal entry on Saxton's books to record the acquisition. Enter your answers in thousands. For example, 51 million = $1,000 or $500,000 - $500. General Journal Description Debit Credit

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