7. This year, Thorn Company acquired all of the common stock of Sally Company. At the...

 

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7. This year, Thorn Company acquired all of the common stock of Sally Company. At the end of the current year, balances of selected accounts and other information for each of the companies were as follows: Salley Sales Thorn $3,735,000 630,000 Accounts receivable $1,943,000 235,000 Sales to Salley during year 100,000 Sales to Thorn during year 40,000 Gross profit on all sales 20% 25% At the end of the year, 40% of the inventory that Thorn sold to Salley remained in Salley's inventory, and $25,000 of the amount of the sales was unpaid. Thorn still owes half of the amount of its purchases to Salley, but had sold all of the inventory it had acquired from Salley by the end of the year. What is the amount of consolidated cost of goods sold at the end of the year? a. $4,250,000 b. $4,437,250 c. $4,305,250 d. $4,297,250 7. This year, Thorn Company acquired all of the common stock of Sally Company. At the end of the current year, balances of selected accounts and other information for each of the companies were as follows: Salley Sales Thorn $3,735,000 630,000 Accounts receivable $1,943,000 235,000 Sales to Salley during year 100,000 Sales to Thorn during year 40,000 Gross profit on all sales 20% 25% At the end of the year, 40% of the inventory that Thorn sold to Salley remained in Salley's inventory, and $25,000 of the amount of the sales was unpaid. Thorn still owes half of the amount of its purchases to Salley, but had sold all of the inventory it had acquired from Salley by the end of the year. What is the amount of consolidated cost of goods sold at the end of the year? a. $4,250,000 b. $4,437,250 c. $4,305,250 d. $4,297,250

Answer rating: 100% (QA)

Cost of goods sold Sales Gross profit Sales of thorn 373... View the full answer