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After NewTune merges with On the Go, calculate goodwill and provide all applicable journal entries. Please show the amount totals for debits and credits. On
After NewTune merges with On the Go, calculate goodwill and provide all applicable journal entries. Please show the amount totals for debits and credits.
On January 1, New Tune Company exchanges 15,000 shares of its common stock for all of the outstanding shares of On-the-Go, Inc. Each of NewTune's shares has a $4 par value and a $50 fair value. The fair value of the stock exchanged in the acquisition was considered equal to On-the-Go's fair value. NewTune also paid $25,000 in stock registration and issuance costs in connection with the merger. Several of On-the-Go's accounts' fair values differ from their book values on this date (credit balances in parentheses): Fair Values . . Receivables. Trademarks . Record music catalog In-process research and development Notes payable Book Values $ 65,000 95,000 60,000 -O (50,000) $ 63,000 225,000 180,000 200,000 (45,000) Precombination book values for the two companies are as follows: On-the-Go . . . Cash Receivables.. Trademarks Record music catalog Equipment (net) Totals New Tune $ 60,000 150,000 400,000 840,000 320,000 $ 1.770,000 $ 29,000 65,000 95,000 60,000 105,000 $ 354,000 ---- . . . . . . . . . . . (continued) New Tune Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings $ (110,000) (370,000) (400,000) (30,000) (860,000) $(1.770,000) On-the-Go $ (34,000) (50,000) (50,000) (30,000) (190,000) $(354,000) TotalsStep by Step Solution
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