On January 1, NewTune Company exchanges 16,705 shares of its common stock for all of the outstanding shares of On-the-Go, Inc. 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 $24,100 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):

	Book Values	Fair Values
Receivables	$	64,250		$	57,700
Trademarks		102,000			235,500
Record music catalog		65,750			247,250
In-process research and development		0			216,000
Notes payable		(59,750	)		(53,550	)

Precombination book values for the two companies are as follows:

	NewTune	On-the-Go
Cash	$	64,750		$	31,500
Receivables		76,250			64,250
Trademarks		470,000			102,000
Record music catalog		896,000			65,750
Equipment (net)		413,000			106,000
Total Assets	$	1,920,000		$	369,500
Accounts payable	$	(154,000	)	$	(34,750	)
Notes payable		(427,000	)		(59,750	)
Common stock		(400,000	)		(50,000	)
Additional paid-in capital		(30,000	)		(30,000	)
Retained earnings		(909,000	)		(195,000	)
Total liabilities and equities	$	(1,920,000	)	$	(369,500	)

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.