On January 1, NewTune Company exchanges 16,167 shares of its common stock for all of the outstanding shares of On-the-Go, Incorporated. Each of NewTunes 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-Gos fair value. NewTune also paid $31,400 in stock registration and issuance costs in connection with the merger.

Several of On-the-Gos accounts fair values differ from their book values on this date (credit balances in parentheses):

Items	Book Values	Fair Values
Receivables	$ 50,750	$ 44,200
Trademarks	104,250	250,500
Record music catalog	75,000	201,750
In-process research and development	0	225,000
Notes payable	(68,250)	(62,750)

Precombination book values for the two companies are as follows:

Items	NewTune	On-the-Go
Cash	$ 63,000	$ 38,500
Receivables	126,000	50,750
Trademarks	459,000	104,250
Record music catalog	841,000	75,000
Equipment (net)	389,000	133,000
Totals	$ 1,878,000	$ 401,500
Accounts payable	$ (129,000)	$ (52,750)
Notes payable	(370,000)	(68,250)
Common stock	(400,000)	(50,000)
Additional paid-in capital	(30,000)	(30,000)
Retained earnings	(949,000)	(200,500)
Totals	$ (1,878,000)	$ (401,500)

Required:

1. Assume that this combination is a statutory merger so that On-the-Gos 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.

2. 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.