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 fair value of the stock exchanged in the acquisition was considered equal to On-the-Go's fair value. NewTune also paid $25,000 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):

a. Assume that this combination is a statutory merger so that On-the-Go's accounts will be transferred in the records of NewTune. On-the-Go will be dissolved and will no longer exist 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, it How do the balance sheet accounts compare across parts (a) and (b)?

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Book Values Fair Values $ 63,000 225,000 Receivables... $65,000 95,000 Trademarks Record music catalog In-process research and development Notes payable 60,000 -0- 180,000 200,000 (50,000) (45.000) Precombination book values for the two companies are as follows: NewTune On-the-Go $ 29,000 65,000 Cash Receivables Trademarks Record music catalog Equipment (net) 60,000 150,000 400,000 840,000 320,000 95,000 60,000 105,000 .... Totals $1,770,000 $354,000 (continued)