On January 1, NewTune Company exchanges 17,808 shares of its common stock for all of the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, NewTune Company exchanges 17,808 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 $36,900 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) Receivables Trademarka Record music catalog In-process research and development Notes payable Book Values $ 32,000 $ Fair Values 27,550 98,250 270,750 82.500 269,250 0 225,000 (66,750) (60,750) Precombination book values for the two companies are as follows: Cash Receivables 83,500 $ 87,500 NewTune $ 443,000 886,000 349.000 On-the-Go 45,300 32,000 98,250 02.500 130,000 396,250 (57,000) (66,750) (50,000) (30,000) (192,500) Trademarka Record music catalog Equipment (net) Total Assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities $ 1,849,000 $ (132,000) 5 (385,000) (400,000) (30,000) (902,000) $ (1,049,000) 5 (396,250) 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 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 Cash Receivables Trademarks Assets Record music catalog In-process research and development Equipment (net) Goodwill Total assets January 1, 20XX Liabilities and Equity Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings $ 0 Total liabilities and equities $ 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.) NEWTUNE COMPANY AND ON-THE-GO, INC. Consolidation Worksheet January 1, 20XX Show less A Cash Consolidation Entries Accounts Newtune Co On-the-Go, Inc. Consolidated Debit Credit Totals Receivables Investment in On-the-Go Trademarks Record music catalog In-process research and development Equipment (net) Goodwill Total assets Accounts payable Notes payable $ 0 $ 0 $ 0 Common stock Additional paid-in capital Retained earnings Total liabilities and equities $ 0 $ 0 $ 0 $ 0 $ 0 < Required A Required > On January 1, NewTune Company exchanges 17,808 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 $36,900 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) Receivables Trademarka Record music catalog In-process research and development Notes payable Book Values $ 32,000 $ Fair Values 27,550 98,250 270,750 82.500 269,250 0 225,000 (66,750) (60,750) Precombination book values for the two companies are as follows: Cash Receivables 83,500 $ 87,500 NewTune $ 443,000 886,000 349.000 On-the-Go 45,300 32,000 98,250 02.500 130,000 396,250 (57,000) (66,750) (50,000) (30,000) (192,500) Trademarka Record music catalog Equipment (net) Total Assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities $ 1,849,000 $ (132,000) 5 (385,000) (400,000) (30,000) (902,000) $ (1,049,000) 5 (396,250) 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 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 Cash Receivables Trademarks Assets Record music catalog In-process research and development Equipment (net) Goodwill Total assets January 1, 20XX Liabilities and Equity Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings $ 0 Total liabilities and equities $ 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.) NEWTUNE COMPANY AND ON-THE-GO, INC. Consolidation Worksheet January 1, 20XX Show less A Cash Consolidation Entries Accounts Newtune Co On-the-Go, Inc. Consolidated Debit Credit Totals Receivables Investment in On-the-Go Trademarks Record music catalog In-process research and development Equipment (net) Goodwill Total assets Accounts payable Notes payable $ 0 $ 0 $ 0 Common stock Additional paid-in capital Retained earnings Total liabilities and equities $ 0 $ 0 $ 0 $ 0 $ 0 < Required A Required >
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 Project S Project L -$1,000 $889.95 -$1,000 $240 $5 $15 $5 $240 $380 $810.16 The company's...
-
On January I. Newtune Company exchanges 15.000 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...
-
On January 1, 2011, NewTune Company exchanges 15,000 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....
-
In 2013, Natural Selection, a nationwide computer dating service, had $500 million of assets and $200 million of liabilities. Earnings be-fore interest and taxes was $120 million, interest expense...
-
Describe the operations function and the nature of the operations managers job.
-
A $100 000, 8% bond redeemable at par with quarterly coupons is purchased to yield 6.5% compounded quarterly. Find the premium or discount and the purchase price if the bond is purchased (a) 15 years...
-
Can the risk of a portfolio be greater than the individual risk of each of the securities it contains? Under what circumstances?
-
A crustal block with mean density 3000 kg m^3 is initially in is ostatic equilibrium with the surrounding rocks whose density is 3200 kg m^3, as in the figure (a). After subsequent erosion the...
-
Find the average rate of change of f(x) of f(x) = sin x In x on the interval 1 x a. Sin(1) In (1) - Sinains 1-9
-
1. Is there a problem in the communication process between Chief Slaughter and his officers? 2. Do you think Chief Slaughter used the most effective channel of communications for his message? 3. Was...
-
Please answer questions below Book: https://d-pdf.com/electronic-book/3918 For twenty years, Gregory Boyles has run Homeboy Industries, a gang-intervention program located in Boyle Heights...
-
A mass-spring system is placed on a frictionless slope as shown below: k W m a) Draw a free-body diagram of the system under static loading. b) Consider any type of disturbance which could be applied...
-
Verify the following chemical equation is balanced N2 + 3H2 2NH3 If you begin with 25.4 grams of H2, how many moles of NH3 can you make? Type answer: rVerify the following chemical equation is...
-
City administrators want to estimate a 95% confidence interval for the proportion of the 1200 high school math students that are passing their corresponding math classes. A random sample of 85...
-
According to learning by doing with spillover model, the growth rate is constant and endogenous to the incentives of decision makers. if key assumption of transition dynamics is tendency of rate of...
-
On January 1 , 2 0 2 3 , Malinois Inc. issued $ 1 0 0 , 0 0 0 of 6 % bonds, dated January 1 . Interest is payable semiannually on June 3 0 and December 3 1 . The bonds mature in 1 0 years. The...
-
What are the three factors that determine cash flow? Question 16 options: Amount of rent received, operating expenses and method of debt repayment Amount of debt owed, appreciation rate, and...
-
A line l passes through the points with coordinates (0, 5) and (6, 7). a. Find the gradient of the line. b. Find an equation of the line in the form ax + by + c = 0.
-
Leeds Architectural Consultants began operations on January 2. The following activity was recorded in the company's Work in Process account for the first month of operations: Leeds Architectural...
-
Estimated cost and operating data for three companies for the upcoming year follow: Predetermined overhead rates are computed using the following bases in the three companies: Required: 1. Compute...
-
Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the...
Study smarter with the SolutionInn App