What are the consolidated Accounts receivable balance at the end of the year?
- This year, Rose Company acquired all of the common stock of Hayley Company. At the end of the current year, balances of selected accounts and other information for each of the companies were as follows:
Rose Hayley
Sales $2,582,000 $1,734,000
Sales to Hayley during year 80,000
Sales to Rose during year 20,000
Gross profit on all sales 25% 30%
At the end of the year, 50% of the inventory that Rose sold to Hayley remained in Hayley’s inventory, and $30,000 of the amount of the sales was unpaid. Rose still owes half of the amount of its purchases to Hayley but had sold all of the inventory it had acquired from Hayley by the end of the year.
What are the consolidated Accounts receivable balance at the end of the year?
a. $815,000
b. $795,000
c. $789,000
d. $775,000
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