On January 1, NewTune Company exchanges 18,100 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 $33,500 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): Book Values Fair Values $ 68,750 $ 66,000 Receivables Trademarks Record music catalog In-process research and development Notes payable 113,250 282,000 68,750 227,000 0 271,500 (72,250) (65,700) Precombination book values for the two companies are as follows: Cash Receivables Trademarks Record music catalog Equipment (net) Total Assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings NewTune On-the-Go $ 70,750 $ 40,500 30,250 68,750 486,000 113,250 853,000 68,750 413,000 110,000 $ 1,853,000 $ 401,250 $ (177,000) $ (56,000) (379,000) (72,250) (400,000) (50,000) (30,000) (867,000) (30,000) (193,000) Total liabilities and equities $(1,853,000) $(401,250) 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. Complete this question by entering your answers in the tabs below. 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 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. Cash Receivables Assets NEWTUNE COMPANY AND ON-THE-GO, INC. Trademarks Record music catalog In-process research and development Equipment (net) Goodwill Post-Combination Balance Sheet January 1, 20XX Liabilities and Equity Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total assets Total liabilities and equities Required A Required 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. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) Show less Cash Receivables NEWTUNE COMPANY AND ON-THE-GO, INC. Consolidation Worksheet January 1, 20XX Consolidation Entries Accounts Newtune Co On-the-Go, Inc. Consolidated Debit Credit Totals Investment in On-the-Go Trademarks Record music catalog In-process research and development Equipment (net) Goodwill Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities < Required A Required B >