On January 1, NewTune Company exchanges 19,336 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 $45,450 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	$	55,250			$	48,400
Trademarks		99,000				294,000
Record music catalog		66,250				256,000
In-process research and development		0				249,000
Notes payable		(72,500	)			(63,900	)

Precombination book values for the two companies are as follows:

	NewTune				On-the-Go
Cash	$	79,500			$	53,500
Receivables		48,500				55,250
Trademarks		478,000				99,000
Record music catalog		923,000				66,250
Equipment (net)		324,000				137,000
Totals	$	1,853,000			$	411,000
Accounts payable	$	(144,000	)		$	(40,500	)
Notes payable		(409,000	)			(72,500	)
Common stock		(400,000	)			(50,000	)
Additional paid-in capital		(30,000	)			(30,000	)
Retained earnings		(870,000	)			(218,000	)
Totals	$	(1,853,000	)		$	(99,000	)

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.

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	$0	Total liabilities and equities	$0

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.)

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NEWTUNE COMPANY AND ON-THE-GO, INC.
Consolidation Worksheet
January 1, 2018
			Consolidation Entries
Accounts	Newtune Co	On-the-Go, Inc.	Debit	Credit	Consolidated Totals
Cash
Receivables
Investment in On-the-Go
Trademarks
Record music catalog
Research and development asset
Equipment
Goodwill
Total assets	$0	$0			$0
Accounts payable
Notes payable
Common stock
Additional paid-in capital
Retained earnings
Total liabilities and equities	$0	$0	$0	$0	$0