E Chapter 2- NewTune and On the Go.pdf 33 Ed 13, 34 ed 14. On January 1, 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: Book Values Fair Values Receivables $ 65,000 S 63.000 Trademarks 95,000 225,000 Record music catalog 60,000 180,000 In-process research and development -0 200.000 Notes payable (50,000 (45.000) Precombination book values for the two companies are as follows New Tune On-the-Go Cash S 60,000 S 29,000 Receivables 150.000 65,000 Trademarks 400,000 95.000 Record music catalog 840,000 60,000 Equipment (net) 320,000 105.000 Totals $ 1,770,000 S 354,000 Accounts payable S (110,000) S (34,000) Notes payable (370,000) (50,000) Common stock (400,000) (50,000) Additional paid-in capital (30,000) (30,000) Retained earnings (860.000) (190.000 Totals S(1.270,000 (354,000) 1. Show all your work and all calculations 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 all journal entries applicable as will as the Goodwill calculation 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. Show all your work and claculations, all journal entries applicable, WBE, and consolidated worksheet