On January 1, NewTune 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): Book Values Receivables Trademarks $ 65,000 Fair Values $63,000 95,000 225,000 Record music catalog 60,000 180,000 In-process research and development Notes payable 0 200,000 (50,000) (45,000) Precombination book values for the two companies are as follows: NewTune On-the-Go Cash Receivables Trademarks Record music catalog Equipment (net) Total Assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities $ 60,000 $ 29,000 150,000 400,000 840,000 320,000 65,000 95,000 60,000 105,000 $ 1,770,000 $ 354,000 5 (110,000) $ (34,000) (370,000) (50,000) (400,000) (50,000) (30,000) (860,000) (30,000) (190,000) $(1,770,000) $(354,000) a. Assume that this combination is a statutory merger so that On-the-Go's accounts will be transferred to the records of NewTune. On- the-Go will be dissolved and will no longer exist as a legal entity. Prepare a postcombination balance sheet for NewTune as of the acquisition date. b. Assume that no dissolution takes place in connection with this combination. Rather, both companies retain their separate legal identities. Prepare a worksheet to consolidate the two companies as of the combination date.