Question

Hello. I am having trouble getting the numbers for assets, liabilities, and equity when creating a post combination balance sheet. I've attached an answer key below but it doesn't explain how you get those numbers.

I would greatly appreciate it if you could provide some calculations and explanations as to how to arrive at the provided answers. Please provide your response in Word or Excel as handwritten responses are hard to read. Thank you.

LO 2-4,2-5, 2-6a, 2-6b, 2-6C LO 2-7, 2-8 33. On January 1, NewTune Company exchanges 15,000 shares of its common stock for all of the out- standing 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 Trademarks Record music catalog.. In-process research and development. Notes payable. $ 65,000 95,000 60,000 -O- (50,000) $ 63,000 225,000 180,000 200,000 (45,000) Precombination book values for the two companies are as follows: New Tune On-the-Go Cash Receivables Trademarks Record music catalog. Equipment (net) Totals.. $ 60,000 150,000 400,000 840,000 320,000 $1,770,000 $ 29,000 65,000 95,000 60,000 105,000 $354,000 (continued)

Answer 1

Cla Book1 - Microsoft Excel Home Insert Page Layout Formulas Data Review View Developer (?) X х AutoSum - * Cut EB Copy Calibri 11 Α Α΄ - Wrap Text General Fill - Paste B I U Fa Merge & Center % 7 * .00 .00.0 Insert Delete Format Format Painter Conditional Format Cell Formatting as Table Styles Styles 2 Clear Sort & Find & Filter - Select Clipboard Font E Alignment Number Cells Editing A1 fox А B D E F G H J K L M 1 2 LE New Tune Company and On the Go Company 3 $ 7,50,000.00 4 Fair value of consideration transferred 5 (15000 shares @$50)=(A) 6 Fair value of net assets acquired=(B) 7 Cash 8 Receivables 9 Trademarks 10 Record music catalog 11 In Process research & development 12 Equipments 13 Accounts Payable 14 Notes Payable 15 Goodwill=(A)-(B) 16 17 18 General, Journal 19 Cash 20 Receivables 21 Trademark 22 Record music catalog 23 In Process research & development 24 Teruinment + Sheet1 Sheet2 Sheet2 Sheet3 Select destination and press ENTER or choose Paste $ 29,000.00 $ 63,000.00 $ 2,25,000.00 $ 1,80,000.00 $ 2,00,000.00 $ 1,05,000.00 $ -34,000.00 $ 45,000.00 $ $ 7,23,000.00 27,000.00 Credit Journal Entry Debit $ 29,000.00 $ 63,000.00 $ 2,25,000.00 $ 1,80,000.00 $ 2,00,000.00 $ 105 000 on Average: 350710.1449 Count: 272 Sum: 48398000 BO 100% Type here to search O x ENG 17:24 23-09-2020 D

Book1 - Microsoft Excel Cla Home Insert Page Layout Formulas Data Review View Developer (?) X х Σ AutoSum και Calibri 11 Α Α΄ 2 Wrap Text - General Fill - * Cut EB Copy Paste Format Painter Clipboard B I U Merge & Center % 7 * .00 .00.0 Insert Delete Format Conditional Format Cell Formatting as Table Styles Styles 2 Clear Sort & Find & Filter - Select Editing Font E Alignment Number Cells A1 fox A D E F G H K L M 17 18 Credit 19 20 21 22 23 B С Journal Entry General Journal Debit Cash $ 29,000.00 Receivables $ 63,000.00 Trademark $ 2,25,000.00 Record music catalog $ 1,80,000.00 In Process research & development $ 2,00,000.00 Equipment $ 1,05,000.00 Goodwill $ 27,000.00 To Accounts Payable To Notes Payable To Common Stock(15000 shares @$4) To Paid in Capital-Excess of par(15000 shares @$46) 24 25 26 27 $ $ $ 34,000.00 45,000.00 60,000.00 28 $ 6,90,000.00 29 30 31 32 33 $ 25,000.00 Additional Paid in capital To Cash (Registeration and issue cost) $ 25,000.00 34 35 36 Assets 37 Cash 38 Receivables 39 Trademarks ► Sheet1 Sheet2 Ready PE Post Combination Balance Sheet Amount Liabilities and Owner's Equity $ 64,000.00 Accounts Payable $ 2,13,000.00 Notes Payable $ 6.25.000.00 Common Stock Amount $ 1,44,000.00 $ 4,15,000.00 $ 4.60.000.00 Sheet3 Average: 350710.1449 Count: 272 Sum: 48398000 BE OM 100% + Type here to search O 0x ENG 17:24 23-09-2020 D

Book1 - Microsoft Excel Cla Home Insert Page Layout Formulas Data Review View Developer (?) X х Σ AutoSum και Calibri 11 Α Α΄ - Wrap Text General Fill - * Cut EB Copy Paste Format Painter Clipboard B I U Fa Merge & Center % 7 * .00 .00.0 Insert Delete Format Conditional Format Cell Formatting as Table - Styles Styles 2 Clear Sort & Find & Filter - Select Editing Font Alignment Number Cells A1 fox A B E F G H 1 1 K M 35 Assets 36 37 38 Cash Receivables Trademarks Record music catalog In Process research & development Equipment Goodwill Total 39 40 41 42 С D Post Combination Balance Sheet Amount Liabilities and Owner's Equity $ 64,000.00 Accounts Payable $ 2,13,000.00 Notes Payable $ 6,25,000.00 Common Stock $ 10,20,000.00 Paid in Capital excess of par $ 2,00,000.00 Retained Earnings $ 4,25,000.00 $ 27,000.00 $ 25,74,000.00 Total Amount $ 1,44,000.00 $ 4,15,000.00 $ 4,60,000.00 $ 6,95,000.00 $ 8,60,000.00 43 44 $ 25,74,000.00 $ 45 46 47 Working of Post Closing Balance Sheet 48 Cash $ 60,000.00 $ 29,000.00 $ -25,000.00 $ 64,000.00 49 New Tune 50 On the GO 51 Less: Registeration and issue expenses 52 Cash balance 53 54 Receivables 55 New Tune 56 On the GO 57 Receivable balance 58 KM Sheet1 Sheet2 Sheet3 Ready MI $ 1,50,000.00 $ 63,000.00 $ 2,13,000.00 Average: 350710.1449 Count: 272 Sum: 48398000 BO 100% - + Type here to search O x ENG 17:24 23-09-2020 D

Book1 - Microsoft Excel Cla Home Insert Page Layout Formulas Data Review View Developer (?) X х AutoSum - Calibri 11 Α Α΄ 2 Wrap Text - General Fill - * Cut EB Copy Paste Format Painter Clipboard B I U a: Merge & Center % 1 .00 .00.0 Insert Delete Format Conditional Format Cell Formatting as Table - Styles Styles 2 Clear Sort & Find & Filter - Select Editing Font E Alignment Number Cells A1 fox A C D E F G H K M 59 60 B Trademark New Tune On the GO Trademark balance 61 $ 4,00,000.00 $ 2,25,000.00 $ 6,25,000.00 62 63 64 65 Record Music catalog New Tune On the GO Record Music Catalog balance 66 $ 8,40,000.00 $ 1,80,000.00 $ 10,20,000.00 67 68 69 70 In Process Research & Development On the GO In Process Research & Development balance $ 2,00,000.00 $ 2,00,000.00 71 72 73 74 75 76 Equipment New Tune On the GO Equipment balance $ 3.20,000.00 $ 1,05,000.00 $ 4,25,000.00 77 78 Goodwill 79 On the GO Goodwill Balance $ $ 27,000.00 27,000.00 80 81 82 KI Sheet1 Ready ME Accounts Payable Sheet2 Sheet3 Average: 350710.1449 Count: 272 Sum: 48398000 OM 100% - + Type here to search jä O x ENG 17:24 23-09-2020 D

Book1 - Microsoft Excel Cla Home Insert Page Layout Formulas Data Review View Developer (?) X х AutoSum - Calibri 11 Α Α΄ - Wrap Text General Fill - * Cut EB Copy Paste Format Painter Clipboard B I U a: Merge & Center % 1 .00 .00.0 Insert Delete Format Conditional Format Cell Formatting as Table - Styles Styles 2 Clear Sort & Find & Filter - Select Editing Font E Alignment Number Cells C D E F G H K M $ 1,10,000.00 $ 34,000.00 $ 1,44,000.00 $ 3,70,000.00 $ 45,000.00 $ 4,15,000.00 A1 fox A B 82 Accounts Payable 83 New Tune 84 On the GO 85 Accounts Payable balance 86 87 Notes Payable 88 New Tune 89 On the GO 90 Notes Payable balance 91 92 Common Stock 93 New Tune 94 On the GO 95 Common Stock balance 96 97 Additional Paid in capital 98 New Tune 99 On the GO 100 Less: Registeration and Issue cost 101 Additional Paid in capital balance 1021 103 Retained Earnings 104 New Tune 1051 Sheet1 Sheet2 Sheet3 Ready MI $ 4,00,000.00 $ 60,000.00 $ 4,60,000.00 $ 30,000.00 $ 6,90,000.00 $ -25,000.00 $ 6,95,000.00 $ 8,60,000.00 Average: 350710.1449 Count: 272 Sum: 48398000 OM 100% - Type here to search O x ENG 17:24 23-09-2020 D

Book1 - Microsoft Excel Cla Home Insert Page Layout Formulas Data Review View Developer (?) X х AutoSum - * Cut EB Copy Calibri 11 Α Α΄ Wrap Text General Fill - Paste I B I U F Merge & Center - % .00 .00.0 Insert Delete Format Format Painter Conditional Format Cell Formatting as Table - Styles Styles 2 Clear - Sort & Find & Filter - Select Clipboard Font Alignment Number Cells Editing - K123 foc A B E F G H 1 J K L M 107 С D New Tune Company and On the Go Company Consolidated Worksheet 108 109 Consolidated entries Consolidated Total New Tune On the Go Dr Cr $ 35,000.00 $ $ 1,50,000.00 $ $ 7,50,000.00 29,000.00 65,000.00 $ 4,00,000.00 $ $ 8,40,000.00 $ 110 111 112 Cash 113 Accounts Receivable 114 Investment in On the GO 115 116 Trademarks 117 Record Music Catalog 118 In Process research & Development 119 Equipment(Net) 120 Goodwill 121 Total Assets 122 Liabilities 123 Accounts Payable 124 Notes Payable 125 Common Stock Additional Paid in capital 127 Retained Earnings 128 Total Liabilities & Equity 1201 K Sheet1 Sheet2 Sheet3 Ready ME 95,000.00 $ 1,30,000.00 60,000.00 $ 1,20,000.00 $ 2,00,000.00 1,05,000.00 $ 27,000.00 3,54,000.00 $ 64,000.00 $ $ 2,000.00 $ 2,13,000.00 $ 4,80,000.00 $ 2,70,000.00 $ 2,70,000.00 $ -2,70,000.00 $ 6,25,000.00 $ 10,20,000.00 $ 2,00,000.00 $ 4,25,000.00 $ 27,000.00 $ 25,74,000.00 $ 3,20,000.00 $ $ 24,95,000.00 $ O $ 1,10,000.00 $ $ 3,70,000.00 $ $ 4,60,000.00 $ $ 6,95,000.00 $ $ 8,60,000.00 $ $ 24,95,000.00 $ 34,000.00 50,000.00 $ $ 5,000.00 50,000.00 $ 50,000.00 30,000.00 $ 30,000.00 1,90,000.00 $ 1,90,000.00 $ 3,54,000.00 $ $ 1,44,000.00 $ 4,15,000.00 $ 4,60,000.00 $ 6,95,000.00 $ 8,60,000.00 $ 25,74,000.00 126 0 BO 100% Type here to search j x ENG 17:25 23-09-2020 D

Book1 - Microsoft Excel Cla Home Insert Page Layout Formulas Data Review View Developer (?) X х AutoSum - * Cut EB Copy Calibri 11 Α Α΄ Wrap Text General Fill - Paste I B I U Merge & Center - % 7 .00 .00.0 Insert Delete Format Format Painter Conditional Format Cell Formatting as Table Styles Styles 2 Clear - Sort & Find & Filter - Select Clipboard Font Alignment Number Cells Editing - K123 fox A B C D E F G H 1 J K L M 129 130 131 Working of Consolidated Worksheet Accounts Receivable decreased by ($65000- $63000) = Trademark Increased by(225000-$95000) = Record Music Catalog increased by($180000- $60000) = In Process Research and development increased by= $ 2,000.00 $ 1,30,000.00 132 133 $ 1,20,000.00 134 $ 2,00,000.00 135 Notes Payable decreased by($50000-$45000)= $ 5,000.00 Goodwill $ 27,000.00 136 $ 4,80,000.00 Total=($130000+$120000+$200000+$5000+$270 137 00-$2000) 138 Cash New Tune =$60000-$25000(Stock registeration and Issue cost) 139 140 Common Stock 141 Additional Paid In Capital 142 Retained Earnings 143 Total($50000+$30000+$190000) 144 Sheet1 Sheet2 Sheet3 Ready MI $ 35,000.00 $ 50,000.00 $ 30,000.00 $ 1,90,000.00 $ 2,70,000.00 E OM 100% C + Type here to search 0x ENG 17:25 23-09-2020 D