On January 1, NewTune Company exchanges 19,633 shares of its common stock for all of the outstanding shares ofOn-the-Go, Inc. Each of NewTune's shares has a $4 par value and a $50 fair value. The fair value of the stockexchanged in the acquisition was considered equal to On-the-Go's fair value. NewTune also paid $45,550 in stockregistration and issuance costs in connection with the merger.Several of On-the-Go's accounts' fair values differ from their book values on this date (credit balances inparentheses):ВookFairValuesValues$ 62,500 $ 60,400294,500270,000243,000(61,700)ReceivablesTrademarks05,50075,750Record music catalogIn-process research and developmentNotes payable(67,000)Precombination book values for the two companies are as follows:NewTuneOn-the-Go76,000 $ 52,75062,500105,50075,750139,000$ 1,930,000 $ 435,500$ (159,000) $ (51,500)(67,000)(50,000)(30,000)(890,000) (237,000)Total liabilities and equities $(1,930, 000) $(435,500)CashReceivables162,000485,000875,000TrademarksRecord music catalogEquipment (net)332,000Total AssetsAccounts payableNotes payable(451,000)(400,000)(30,000)Common stockAdditional paid-in capitalRetained earningsa. Assume that this combination is a statutory merger so that On-the-Go's accounts will be transferred to therecords of NewTune. On-the-Go will be dissolved and will no longer exist as a legal entity. Prepare apostcombination 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 theirseparate legal identities. Prepare a worksheet to consolidate the two companies as of the combination date.

(a) Post Combination Balance Sheet :- Assets Liabilities & Owners Equity Cash…

e-Go, Inc. Each of NewTune's shares has a $4 par value and a $50 fair value. anged in the acquisition was considered equal to On-the-Go's fair value. NewTu tration and issuance costs in connection with the merger. ral of On-the-Go's accounts' fair values differ from their book values on this dat ntheses): Вook Fair Values Values $ 62,500 $ 60,400 294,500 270,000 243,000 (61,700) ceivables ademarks cord music catalog -process research and development ces payable 105,500 75,750 (67,000)

e-Go, Inc. Each of NewTune's shares has a $4 par value and a $50 fair value. anged in the acquisition was considered equal to On-the-Go's fair value. NewTu tration and issuance costs in connection with the merger. ral of On-the-Go's accounts' fair values differ from their book values on this dat ntheses): Вook Fair Values Values $ 62,500 $ 60,400 294,500 270,000 243,000 (61,700) ceivables ademarks cord music catalog -process research and development ces payable 105,500 75,750 (67,000)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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please make sure you are using the values in this question because they are differerent
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