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exchanges 15,000 shares of its common stock for a of the out- On January I, NewTune Company standing shares of On-the-Gio, Inc. Each of NewTune's
exchanges 15,000 shares of its common stock for a of the out- On January I, NewTune Company standing shares of On-the-Gio, Inc. Each of NewTune's shares has a S4 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 Book Values Fair Values $65,000 95,000 60,000 $63,000 225,000 180,000 200,000 (45,000) 0 In-process research and development. (50,000) Precombination book values for the two companies are as follows: NewTune On-the-Go $60,000 50,000 400,000 840,000 320,000 $1,770.000 29,000 65,000 95,000 60,000 105,000 $354,000 Cash Totals.... $10,000) (370,000) (400,000) (30,000) (860,00O) $(1,770,000) $ (34,000) (50,000) (50,000) (30,000) (190,000) $(354,000) Required: Turn in one solution per group. Submit solution electronically by 5:00 PM On Thursday, February 28, 2019. Assuming no dissolution takes place in connection with this combination: A. Prepare the journal entries needed on the combination date. B. Prepare a worksheet to consolidate the two companies as of the combination date
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