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Question - Freemore Company has the following sales budget for the last six months of 2020.
July $207,000
August 169,000
September 205,000
October 188,000
November 206,000
December 185,000
Sales are immediately? due, however the cash collection of? sales, historically, has been as? follows:
65?% of sales collected in the month of? sale,
25?% of sales collected in the month following the? sale,
8?% of sales collected in the second month following the? sale, and
2?% of sales are uncollectible.
What is the ending balance of accounts receivable for the end of? September, assuming uncollectible balances are written off at the end of the second month following the? sale?
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Budgets meet the cost-benefit test. They are necessary to force managers to be disciplined and think about the future." Do you agree? Why or why not?
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