E 11-8 Push-down capitals under parent-company and entity theories Pow Inc. acquired an 80 percent interest in

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E 11-8 Push-down capitals under parent-company and entity theories Pow Inc. acquired an 80 percent interest in Wow Inc. for $280,000 in cash on January 1, 2014. At the time, Wow had overvalued inventory of $20,000, overvalued account receivables of $50,000, and overvalued plant assets of $20,000.

Wow’s equity were $200,000 in common stock and $50,000 in retained earnings.

REQuIRED 1. Calculate the total amount of push-down capital under the parent-company theory.

2. Calculate the total amount of push-down capital under the entity theory.

412 CHAPTER 11

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Advanced Accounting

ISBN: 9781292214597

13th Global Edition

Authors: Joseph H. Anthony, Bruce Bettinghaus, Floyd A. Beams, Kenneth Smith

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