Rosewood Guitar, Inc. is preparing it cash receipts schedule for the 1stquarter ending 20x1. In...
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Accounting
Rosewood Guitar, Inc. is preparing it cash receipts schedule for the 1stquarter ending 20x1. In doing so, its budget director prepared the following budgeted sales schedule:
Rosewood Guitar Company
Sales Budget
For the Quarter Ending March 31, 20x1
January
February
March
Budgeted sales
$185,000
$195,000
$225,000
Addition Information:
Sales for the prior November and December 200x0 were $150,000 and $165,000, respectively.
55% of sales are for cash, the remaining 45% are credit sales.
Credit sales are collected as follows:
15% in the month of sale
65% in the month following the sale, and the remaining
15% in the second month following the sale.
The company estimates that the remainder of credit sales will be uncollectible.
Required
Prepare a cash receipts schedule for the first quarter of 20x1. (Please show your detailed schedule)
What is the total amount of uncollected accounts receivable for the 3-month period, January, February and March?
Briefly, provide the definition for the term budgetary slack. Why does, budgetary slack occur?
What is the primary indication that budgetary slack is occurring?
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