please answer both parts
On January 1, NewTune Company exchanges 16,329 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 $46,600 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: Receivables Trademarks Record music catalog In-process research and development Notes payable Book Values Fair Values $ 34,000 $ 27,700 99,250 252, 250 61,500 201,000 201,750 (67,500) (61,000) Precombination book values for the two companies are as follows: On-the-Go 51.500 5 Cash Receivables Trademarks Record music catalog Equipment (net) Totals Accounts payable Notes payable Common stock Additional paid in capital New Tune 65.250 45.750 488,000 924,000 416.000 $ 1,939,000 0 .000 (417.000) 400.000 (30.000 99,250 61.500 171.000 $417,250 57.25) (67,500) 50.000 (30.000 5 1 Next Precombination book values for the two companies are as follows: Cash Receivables Trademarks Record music catalog Equipment (net) Totals Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Totals New Tune 65,250 45,750 488,000 924,000 416,000 $ 1,939,000 5 (144,000) (417,000) (400,000) (30,000) (948,000) $(1,939,000) On-the-Go $ 51,500 34.009 99,25 61,500 171,000 $ 417,250 5 (57,258) (67,500) (50,000) (30,000) (212,500) $ (99,250) a. Assume that this combination is a statutory merger so that On-the-Go's accounts will be transferred to the records of New Tune. 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. 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 New Tune. On-the-Go will be dissolved and will no longer exist as a legal entity. Prepare a postcombination balance sheet for New Tune 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 Retained earnings Research and development asset Equipment Goodwill Total liabilities and equities Total assets 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 NEWTUNE COMPANY AND ON-THE-GO, INC. Consolidation Worksheet January 1, 2018 Consolidation Entries Debit Credit Accounts Newtune Co On-the-Go Consolidated Totals Inc. Cash Receivables Investment in On-the-Go Trademarks Record music catalog Research and development asset Equipment Goodwill Total assets Accounts payable Notes payable Common stock
