On January 1, NewTune Company exchanges 17,632 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 $29,550 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	$	52,000		$	49,600
Trademarks		114,000			309,750
Record music catalog		66,750			201,750
In-process research and development		0			226,500
Notes payable		(57,750	)		(52,600	)

Precombination book values for the two companies are as follows:

	NewTune			On-the-Go
Cash	$	83,750		$	35,250
Receivables		115,250			52,000
Trademarks		493,000			114,000
Record music catalog		879,000			66,750
Equipment (net)		356,000			126,000
Total Assets	$	1,927,000		$	394,000
Accounts payable	$	(136,000	)	$	(45,750	)
Notes payable		(433,000	)		(57,750	)
Common stock		(400,000	)		(50,000	)
Additional paid-in capital		(30,000	)		(30,000	)
Retained earnings		(928,000	)		(210,500	)
Total liabilities and equities	$	(1,927,000	)	$	(394,000	)

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.

On January 1, NewTune Company exchanges 17,632 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 $29,550 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	$	52,000		$	49,600
Trademarks		114,000			309,750
Record music catalog		66,750			201,750
In-process research and development		0			226,500
Notes payable		(57,750	)		(52,600	)

Precombination book values for the two companies are as follows:

	NewTune			On-the-Go
Cash	$	83,750		$	35,250
Receivables		115,250			52,000
Trademarks		493,000			114,000
Record music catalog		879,000			66,750
Equipment (net)		356,000			126,000
Total Assets	$	1,927,000		$	394,000
Accounts payable	$	(136,000	)	$	(45,750	)
Notes payable		(433,000	)		(57,750	)
Common stock		(400,000	)		(50,000	)
Additional paid-in capital		(30,000	)		(30,000	)
Retained earnings		(928,000	)		(210,500	)
Total liabilities and equities	$	(1,927,000	)	$	(394,000	)

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.

On January 1, NewTune Company exchanges 17,632 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 $29,550 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	$	52,000		$	49,600
Trademarks		114,000			309,750
Record music catalog		66,750			201,750
In-process research and development		0			226,500
Notes payable		(57,750	)		(52,600	)

Precombination book values for the two companies are as follows:

	NewTune			On-the-Go
Cash	$	83,750		$	35,250
Receivables		115,250			52,000
Trademarks		493,000			114,000
Record music catalog		879,000			66,750
Equipment (net)		356,000			126,000
Total Assets	$	1,927,000		$	394,000
Accounts payable	$	(136,000	)	$	(45,750	)
Notes payable		(433,000	)		(57,750	)
Common stock		(400,000	)		(50,000	)
Additional paid-in capital		(30,000	)		(30,000	)
Retained earnings		(928,000	)		(210,500	)
Total liabilities and equities	$	(1,927,000	)	$	(394,000	)

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.