1. Based on the reports provided by your team describe the trend in sales and cash collections for TechWear's first 10 months of operations? 2. Based on the reports provided, what does the days sales outstanding (DSO) ratio for the month of November indicale? How does that compare to other months? 3. Based on the reports, what percentage of TechWear's accounts receivable are overdue (i.e., more than 30 days old)? 4. Based on the reports, which customer has the smallest balance of overdue (i.e., more than 30 days old) accounts receivable? 5. Suppose TechWear and its auditor determined that TechWear should record an allowance for uncollectible accounts of $11,577. What amount of net accounts receivable would TechWear report on its balance sheet as of December 31, 2023? 6. What are some of the advantages and disadvantages to offering credit to customers, especially for a young company like TechWear? 7. What are some recommendations you would provide to your partners about how TechWoar could belter manage its collectability risk? Write a summary based upon your findings. Your summary should include facts from the case information and your assessments of the questions above. Be sure to include a citation for where the values were obtained Summarize the original information given in the case and provide appropriate citation for that information as well. Background 1 In-March-2023, you jolned with two business partners to start a new-company callod TechWear, a privately-owned business that manufactures and sells upper-end, high-tech-sportswear. TechWear's: primary product is a tine of tightweight exercise clothes that contain a-new-long-range -RFID-chlp that captures the following information-about the-user based-on-personal-data (age, woight, etc.) - entered by. the user-11 Heart rateI Perspiration-ratell > Calories bumedil > Exercise efficlency-(percent-of-capacly) ) The chlp can-continuously-send thls - information to a host device-as far away-as 15 - m lles. The clothes arealso-GPS - enabled-and-able to -track routes, distances-and-elevations. You and your-partners-pildeyourselves on being on the cutting edge and hope to take the company public within-five years.-1 Assessing accounts receivable-collectibilityrisk11 TechWear sells tis products to targe distribution outlets, each of which is considered a major customer. To. attract as many new customers as possible, the company grants its customers credit (Le, sells its: products-on-account) and allows - customers 30 doys to pay their accounts. After 30 -days, accounts: receivable are considered overdue and the -company sends-customers-overdue noticos. If TechWear recently reached the end of calendar year 2023. Eager to improve the company's cash flow. situation, you-ask your accounting team to prepare reports on the company's collection of accounts: recelvable for fits first-10 months of operations (March-December-2023). You hope-to-use these reports to. assess the risk-that some of TechWear's accounts.recelvable may not ultimately be collected (Le. collectibiliv-riskn. uccessibenty investignte TectiWoar Sales \& Cash Receipts TechWear Days' Sales Outstanding (DSO) \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} \hline Month & Dso & Sole & & Ce & ShRocelpt & Ao & ts recolvablo & Deys & Cumuletive days \\ \hline March & 28 & 5 & 158,672,64 & s & 16,157,44 & 5 & 142,515.20 & 31 & 31 \\ \hline April & 45 & $ & 403,702.94 & 5 & 105,415.84 & $ & 298,287.10 & 30 & 61 \\ \hline May & 47 & $ & 627,90991 & $ & 306,889.62 & $ & 321,020.29 & 31 & 92 \\ \hline June & 56 & $ & 834,339.81 & $ & 448,905.24 & $ & 385,434.57 & 30 & 122 \\ \hline July & 64 & 5 & 1,192,343,74 & 5 & 695,852.78 & $ & 496,490,96 & 31 & 153 \\ \hline August & 71 & 5 & 1,483,290,34 & s & 909,960.15 & $ & 573,330.19 & 31 & 184 \\ \hline Septernber & 64 & $ & 1,721,216.21 & 5 & 1,208,360.30 & $ & 512.855 .91 & 30 & 214 \\ \hline Octobor & 82 & $ & 2,056,380.99 & 5 & 1,371,912.96 & s & 684,468,03 & 31 & 245 \\ \hline November & 95 & 5 & 2,423,059.64 & $ & 1,581,866.95 & 5 & 841,192.69 & 30 & 275 \\ \hline December & 74 & 5 & 2,828,314.55 & $ & 2,143,823.36 & $ & 684,491.19 & 31 & 306 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline Sum of December 312023 & & & Category & & & & \\ \hline CustName & & TransactionNumbe - & 030 & 3160 & 6190 & >90 & Grand Total \\ \hline gBigmart & & & $26,285.95 & $38,278.36 & & & $64,564.31 \\ \hline ECool Threads & & & $21,113.13 & & & & $21,113,13 \\ \hline 9 Cross Country Mart & & & & & $21,275.25 & & $21,275.25 \\ \hline EFamily Fit & & & $9,615.96 & $20,019.02 & & & $29,634.98 \\ \hline DFit NFun & & & $12.786.27 & & & & $12,786.27 \\ \hline Goodway & & & & $46,520.22 & & & $46.520.22 \\ \hline INNeighborhood Athletic Su & uppl & & $23,29670 & & & & $23,296.70 \\ \hline ENorthem Lites: & & & $89,531.79 & $24,17902 & $11.061.21 & $14,103.74 & $138,875,76 \\ \hline MRunner's Market & & & $36,757,73 & & $14.658.98 & & $51,416.71 \\ \hline ESoutheast Regional & & & $55,964.18 & & $13.742.20 & & $69.706.38 \\ \hline gSouthem Runners & & & $27,092.42 & $40,930.42 & $912.00 & & $68,934.84 \\ \hline ES Super Runners Mark & & & $17.778.84 & $34,651.54 & & & $52,430.38 \\ \hline GUiban Runner & & & $34,04484 & $15,445.09 & $788.03 & & $50.277.96 \\ \hline EV ValueChoice & & & $23,71856 & 59,93974 & & & $33,658.30 \\ \hline Grand Total & & & $377.986.37 & $229.963.41 & $62,437.67 & 514,103.74 & $684,491.19 \\ \hline & & & & & & & \\ \hline & & & 030 & 31.60 & 6190 & >90 & \\ \hline & & & 55% & 34% & 9% & 2% & 100% \\ \hline & & & & & & & \\ \hline & & & \$ 377,986.37 & 5229.96341 & $62,43767 & $14,10374 & \$ 684,491.19 \\ \hline \end{tabular} 6. TechWear AR Aging Schedule Chart TechWear AR Aging Schedule \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline Sum of December 31202 & & & Category & & & & \\ \hline CustName & {[v} & TransactionNumbel v & 030 & 3160 & 6190 & >90 & Grand Total \\ \hline gBigmart & & & $26,285.95 & $38,278.36 & & & $64,564.31 \\ \hline ECcol Threads & & & $21,113.13 & & & & $21,113,13 \\ \hline gicross Country Mart & & & & & $21,275.25 & & $21,275.25 \\ \hline EFamily Fit & & & $9,615,96 & $20,019.02 & & & $29,634,98 \\ \hline DFit N Fun & & & $12.786.27 & & & & $12,786.27 \\ \hline GGoodway & & & & $46,520.22 & & & $46,520.22 \\ \hline INNeighborh & Supph & & $23,29670 & & & & $23,296.70 \\ \hline ENor & & & $89,531.79 & $24,17902 & $11.06121 & $14.103.74 & $138,875,76 \\ \hline Runner's. Market & & & $36,75773 & & $14.658.98 & & $51,41671 \\ \hline ESoutheast Regional & & & $55,964,18 & & $13.742.20 & & $69.706.38 \\ \hline 19 Southem Runners & & & $27,092.42 & $40,930.42 & $912.00 & & $68,93484 \\ \hline ESuper Runners Mark & & & $17.778.84 & $34,651.54 & & & $52,430.38 \\ \hline GUrban Runner & & & 4484 & $15,445.09 & $788.03 & & $50.277.96 \\ \hline EValueChoice & & & 1856 & $9,939.74 & & & $33,658.30 \\ \hline Grand Total & & & $377.98637 & $229.963.41 & $62,437.67 & $14,103.74 & $684,491.19 \\ \hline \end{tabular} 25 26 27 \begin{tabular}{|c|c|c|c|c|} \hline 030 & 31.60 & 6190 & >90 & \\ \hline 55% & 34% & 9% & 2% & 100% \\ \hline 98 & 522996341 & $62,43767 & $14,103.74 & S 684,491.19 \\ \hline \end{tabular} 6. TechWear AR Aging Schedule Chart
