On January 1, NewTune Company exchanges 16,888 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 $38,600 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: Receivables Trademarks Record music catalog In-process research and development Notes payable Book Values $ 29,250 106,500 67,000 0 (62,500) Fair Values $ 22,900 282,000 190,000 221,250 (54,500) Precombination book values for the two companies are as follows: NewTune 64,000 117,000 Cash Receivables Trademarks Record music catalog Equipment (net) Totals Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Totals 868,000 402,000 $ 1,945,000 $ (158,000) (450,000) (400,000) (30,000) (907,000) $(1,945,000) On-the-Go $ 45,000 29, 250 106,500 67,000 150,000 $ 397,750 $ (44,750) (62,500) (50,000) (30,000) (210, 500) $ (106,500) 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. Required A Required B Assume that this combination is a statutory merger so that On-the-Go's accounts will be transferred to the records of New Tune. On-the-Go will be dissolved and will no longer exist as a legal entity. Prepare a postcombination balance sheet for New Tune as of the acquisition date. NEWTUNE COMPANY AND ON-THE-GO, INC. Post-Combination Balance Sheet January 1, 2018 Assets Liabilities and Stockholders' Equity Cash Accounts payable Receivables Notes payable Trademarks Common stock Record music catalog Additional paid-in capital Research and development asset Retained earnings Equipment Goodwill Total assets 0 Total liabilities and equities