a.

Fair value of the consideration transferred(shares issued) $ 868,000

(17360 shares * $50)
Fair value of net assets acquired
Cash $ 50,250
Receivables $ 41,300
Trademarks $ 277,750
Record music catalog $ 186,750
In process research and development $ 261,000
Equipment $ 108,000
Accounts Payable $ (43,500)
Notes Payable $ (48,350) $ 833,200
Goodwill $ 34,800

Journal Entries by new tune to record combination with on the go

Cash $ 50,250
Receivables $ 41,300
Trademarks $ 277,750
Record music catalog $ 186,750
In process research and development $ 261,000
Equipment $ 108,000
Goodwill $ 34,800
Accounts Payable $ 43,500
Notes Payable $ 48,350
Common Stock(new tune par value)(17360*$4) $ 69,440
Additional paid in capital(17360 *$46) $ 798,560
(to record merger with on the go)

Additional Paid in capital $ 44,650

Cash $ 44,650
(stock issue coat incurred)
 Post combination Balance Sheet
Cash $ 67,600 Accounts Payable
Receivables $ 166,300 Notes Payable
Trademarks $ 718,750 Common Stock
Record music catalog $ 1,059,750 Additional paid in capital
In process research and development $ 261,000 Retained earning
Equipment $ 452,000
Goodwill $ 34,800
Total Assets $ 2,760,200 Tota Liabilties & Equity
$ 193,500
$ 426,350
$ 469,440
$ 783,910
$ 887,000

$ 2,760,200
 Post-Combination Balance Sheet
Fair value of consideration transferred (shares issued) 17435*50 $ 871,750 Assets Liabilities and Owners’ Equity
Fair value of net assets acquired: Cash $ 80,950 Accounts Payable $ 232,000
Cash $ 35,500 Receivables $ 181,000 Notes Payable $ 480,650
Receivables $ 28,000 Trademarks $ 767,500 Common Stock $ 469,740
Trademarks $ 296,500 Record Music Catalog $ 1,131,500 Additional Paid-In Capital $ 805,460
Record music catalog $ 222,500 Research and Development Asset $ 226,500 Retained Earnings $ 917,000
In-process research and development $ 226,500 Equipment $ 483,000
Equipment $ 109,000 Goodwill $ 34,400
Accounts payable $ (35,000)
Total assets $ 2,904,850 Total liabilities and equities $ 2,904,850
Notes payable $ (45,650) $ 837,350
Goodwill $ 34,400
Cash 80,950 72000+35500-26550
(where fair values have been given fair values are used Receivables 181,000 153000+28000
else book values are used) Trademarks 767,500 471000+296500
Record Music Catalog 1,131,500 909000+222500
Journal enty to record combination Research and Development Asset 226,500 given
General Journal Debit Credit Equipment 483,000 374000+109000
Cash 35,500 Goodwill 34,400 working note
Receivables 28,000 Accounts Payable 232000 197000+35000
Trademarks 296,500 Notes Payable 480650 435000+45650
Record Music Catalog 222,500 Common Stock 469,740 400000+69740
Research and Development Asset 226,500 Additional Paid-In Capital 805,460 30000+802010-26550
Equipment 109,000 Retained Earnings 917000 only parent
Goodwill 34,400
Accounts Payable 35,000
Notes Payable 45,650
Common Stock (NewTune par value) 69,740 17435*4
Additional Paid-in Capital 802,010 17435*(50-4)
(To record merger with On-the-Go at fair value)

Additional Paid-In Capital 26,550

Cash 26,550
(Stock issue costs incurred)
b.

Consolidation Worksheet
Because On-the-Go continues as a separate legal entity, NewTune first records
the acquisition as an investment in the shares of On-the-Go. Consolidated
Newtune On the go Debit Credit totals
Cash $ 45,450 $ 35,500 $ 80,950
Investment in On the Go 871,750 Receivables $ 153,000 $ 32,500 $ 4,500 $ 181,000 32500-28000
Common Stock(New tune co. Par Value) 69,740 Investment in on the go $ 871,750 $ 281,000
Additional Paid in capital 802,010 $ 590,750
(to record acquisition of on the go's shares) Trademarks $ 471,000 $ 113,500 $ 183,000 $ 767,500 296500-113500
Record music catalog $ 909,000 $ 80,750 $ 141,750 $ 1,131,500 222500-80750
Additional Paid in capital 26550 In process research and development $ 226,500 $ 226,500
Cash 26550 Equipment $ 374,000 $ 109,000 $ 483,000
Goodwill $ 34,400 $ 34,400
Totals $ 2,824,200 $ 371,250 $ 2,904,850

Accounts Payable $ 197,000 $ 35,000 $ 232,000

Notes Payable $ 435,000 $ 55,250 $ 9,600 $ 480,650 45650-55250
Common Stock $ 469,740 $ 50,000 $ 50,000 $ 469,740
Additional paid in capital $ 805,460 $ 30,000 $ 30,000 $ 805,460
Retained earning $ 917,000 $ 201,000 $ 201,000 $ 917,000
Totals $ 2,824,200 $ 371,250 $ 876,250 $ 876,250 $ 2,904,850
77,100 160,750
197,500 482,800
728,00 467,68
1,121,2 779,46
201,75 941,00
476,00
30,100

2,831,700 2,831,700