Task: Crystal, Incorporated acquired 100 percent of the assets and liabilities of Design, Inc. by issuing its common stock in a business combination. At the time of the combination, the fair values of Design's net assets and Crystal's common stock were $440,000 and $410,000, respectively; the book value of Design's net assets was $320,000, and the par value of Crystal's stock was $160,000. Included in Design's net assets was equipment with a fair value of $300,000 and a book value of $180,000.
Question 1: Based on the information given above, the excess of Crystal's acquisition cost over the book value of Design's net assets is:
- $(30,000).
- $30,000.
- $90,000.
- $120,000.
Question 2: Based on the information given above, the amount to be reported as goodwill subsequent to the combination is:
- $0.
- $(30,000).
- $30,000.
- $90,000.
Question 3: Consider the information given above. If the total book value of Crystal's net assets is $900,000, what is the total amount of net assets of both companies combined?
- $1,220,000.
- $1,310,000.
- $1,340,000.
- $1,540,000.