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

In recent years Morten Ltd, in recent years Morten Ltd, a company that manu...

in recent years Morten Ltd, a company that manufactures and markets a range of pharmaceutical products.

Maximum loss method, a,b,c carried on business and their profit and loss ra...

a,b,c carried on business and their profit and loss ratio 3:4:5.they decided dissolve the partnership as on 1st july,2011.the following balance sheet..... creditors-10000 loan A/c-

Indian company, content of financial statement with refrence to indian comp...

content of financial statement with refrence to indian company

Different powers of investment-trust laws and accounts , Powers of investme...

Powers of investment 1. Shares and debentures:  A trustee may: Invest in bearer securities if these would otherwise be authorised;    Acquiesce in an amalgamation

What are the tax effects of the debt adjustments, Harry purchased equipment...

Harry purchased equipment for his business and gave the seller cash and a note due in two years. Larry also purchased business equipment, but financed the transaction with a bank l

Show the expatriation tax, Q. Show the Expatriation Tax? Expatriation T...

Q. Show the Expatriation Tax? Expatriation Tax - Individuals who loose or terminate their residency within 10 year period immediately preceding the close of a tax year, if term

Weighing up the costs and benefits, Weighing up the costs and benefits ...

Weighing up the costs and benefits You may feel that, when considering a piece of accounting information, provided four main qualities identified are present and it's material

Distinctions between a business combination and a merger, What are the lega...

What are the legal distinctions between a business combination, a merger, and a consolidation? Mergers Vs Acquisitions: When one company takes over another and clearly esta

Financial statement with reference to Indian companies, discuss the content...

discuss the content of financial statement with reference to Indian companies?

Accounting date-trusts accounts-trusts laws and accounts, Accounting Date ...

Accounting Date In determining the accounting date of the trust, the trustees will consider the following: Date of death (accounts to anniversary of death); Fiscal y

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