On January 1, NewTune Company exchanges 16,921 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 $28,900 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): Receivables Trademarks Record music catalog In-process research and development Notes payable Book Values Fair Values $ 56,750 $ 50,250 116,250 276,000 65,500 243,250 0 201,750 (74,000) (64,800) 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 $ 68,750 $ 37,250 147,250 56,750 452,000 116,250 878,000 65,500 354,000 122,000 $ 1,900,000 $ 397,750 $ (111,000) $ (49,750) (418,000) (74,000) (400,000) (30,000) (50,000) (30,000) (941,000) (194,000) Total liabilities and equities $(1,900,000) $(397,750) 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. h Accume that no dissolution takes place in connection with this combination Rather hoth comnanios retain their conarate lonal < Prev www 2 of 16 Next >