On January 1, NewTune Company exchanges 17,949 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 $23,500 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:

Book Values Fair Values

Receivables 35,250 29,150

Trademarks 105,500 255,500

Record Music Cat 80,000 267,500

In process R&D 0 233,500

notes payable (66,250) (56,900)

NewTune				On-the-Go
Cash	$	74,000			$	30,000
Receivables		128,000				35,250
Trademarks		411,000				102,500
Record music catalog		928,000				80,000
Equipment (net)		379,000				166,000
Totals	$	1,920,000			$	413,750
Accounts payable	$	(189,000	)		$	(51,500	)
Notes payable		(465,000	)			(66,250	)
Common stock		(400,000	)			(50,000	)
Additional paid-in capital		(30,000	)			(30,000	)
Retained earnings		(836,000	)			(216,000	)
Totals	$	(1,920,000	)		$	(102,500	)

Precombination book values for the two companies are as follows:

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.

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.

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		Total liabilities and equities