On January 1, NewTune Company exchanges 18,688 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 $35,250 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	$	51,750			$	49,150
Trademarks		96,000				267,750
Record music catalog		84,500				240,500
In-process research and development		0				265,500
Notes payable		(72,000	)			(63,750	)

Precombination book values for the two companies are as follows:

	NewTune				On-the-Go
Cash	$	70,000			$	41,000
Receivables		140,000				51,750
Trademarks		418,000				96,000
Record music catalog		931,000				84,500
Equipment (net)		333,000				138,000
Totals	$	1,892,000			$	411,250
Accounts payable	$	(113,000	)		$	(38,250	)
Notes payable		(467,000	)			(72,000	)
Common stock		(400,000	)			(50,000	)
Additional paid-in capital		(30,000	)			(30,000	)
Retained earnings		(882,000	)			(221,000	)
Totals	$	(1,892,000	)		$	(96,000	)

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.