User Account

All Pages

Statutory Merger, Financial Accounting

Assignment Help:
On January 1, 2013, NewTune Company exchanges 15,000 shares of its common stock for all of the outstanding shares of On-the-Go, Inc. Each 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 Om-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 have fair values that differ from their book values on this date:
Receivables $65,000 (book value) $63,000 (fair value)
Trademarks 95,000 (BV) 225,000 (FV)
Record music catalog 60,000 (BV) 180,000 (FV)
In-process research and development -0- (BV) 200,000 (FV)
Notes Payable (50,000) (BV) (45,000) (FV)

Precombination January 1, 2013, book values for the two companies are as follows:
Cash $60,000 (NT) $29,000 (On-the-Go)
Receivables 150,000 (NT) 65,000 (OTG)
Trademarks 400,000 (NT) 95,000 (OTG)
Record music catalog 840,000 (NT) 60,000 (OTG)
Equipment 320,000 (NT) 105,000 (OTG)
Totals: NewTune: $1,770,000 On-the-Go: $354,000
Accounts Payable $(110,000) (NT) (34,000) (OTG)
Notes Payable (370,000) (NT) (50,000) (OTG)
Common Stock (400,000) (NT) (50,000) (OTG)
Additional Paid-in Capital (30,000) (NT) (30,000) (OTG)
Retained earnings (860,000) (NT) (190,000) (OTG)

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.

c. How do the balance sheet accounts compare across parts a and b?

Related Discussions:- Statutory Merger

Fiscal policy , Fiscal Policy In a democracy, elected officials of the...

Fiscal Policy In a democracy, elected officials of the government create programs for the general welfare of the population. To pay for these programs, the government taxes in

Cst , how to account cst collected

how to account cst collected

Find the price of a treasury bond , The time t= 0 continuously compounded...

The time t= 0 continuously compounded term structure of interest rates is given by R(0 , T) = 0. 05 - 0. 005 e - 0.10 T . Find the price of a Treasury bond with exactly 3

Business mathamatics, im doing compound interest my calculator doest have a...

im doing compound interest my calculator doest have anxy butyx cant do nothing with the ten being the power of .9

Instantaneous standard deviation, The current stock price of International ...

The current stock price of International Wood is $69 and the stock does not pay dividends. The instantaneous risk free rate of return is 10%. The instantaneous standard deviation

Estimate comparative advantage, The only two countries in the world, Alpha ...

The only two countries in the world, Alpha and Omega, face the following production possibilities frontiers (all units measured in tons). Alpha's Production PossibilitiesFrontier

ACCOUNTING THEORY, HOW DOES ACCOUNTING THEORY INFLUENCE ACCOUNTING POLICY M...

HOW DOES ACCOUNTING THEORY INFLUENCE ACCOUNTING POLICY MAKING

Identify the depreciation methods, Identify the Depreciation Methods O...

Identify the Depreciation Methods On January 3, 2005, XYZ Distribution Co. paid $224,000 for a computer system. In addition to the basic purchase price, the company paid a set

Corporate financial accounting, Independent research of the key topics avai...

Independent research of the key topics available on the website of professional accounting bodies

Compute the future value - shorter compounding period, Compute the future v...

Compute the future value of Rs.5000 at the end of 6 years, whether nominal interest rate is 12 percent and the interest is allocated (payable) quarterly at frequency = 4 Soluti

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd