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Question - Oscorp makes all sales on account, subject to the following collection pattern: 20% are collected in the month of sale; 70% are collected in the first month after the sale; and 10% are collected in the second month after the sale. If sales for October, November and December were $70,000, $60,000 and $50,000, respectively, what were the firm's budgeted collections for December?
$46,000
$10,000
$59,000
$52,000
None of the above
Use the AREA framework to explain why Target's practice can be considered earnings management
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