Page 120 days outstanding. Please outline the process you used to calculate these amounts. 6. The owners would appreciate some assistance in calculating the bad debt expense for the year. Industry benchmarks indicate that companies record bad debt expense as 1% of sales or the following percentages if the aging method is used: 0-30 Days Outstanding 5% 31-60 Days Outstanding 7.5% 61-90 Days Outstanding 10% 91-120 Days Outstanding 25% >120 Days Outstanding 50% WCB has not decided whether it is going to use the percentage of sales or the aging method. As such, the owners would like you to calculate the bad debt expense using both approaches. Please remember to explain your calculations. The owners would also like to know what factors that they should consider when determining the correct approach. 7. The loan officer at the bank has asked WCB to assess its ability to collect cash from its customers. This is important because the company needs cash flow in order to make the loan payments. The owners have done some research and have found that comparable companies report the following accounts receivable buckets: 0-30 Days Outstanding 75% 31-60 Days Outstanding 15% 61-90 Days Outstanding 5% 91-120 Days Outstanding 3% >120 Days Outstanding 2% The above percentages reflect the portion of accounts receivable that corresponds to each bucket. For example, these percentages can be interpreted as follows: if the comparable company has $1 million of accounts receivable, then $750,000 of this balance has typically been outstanding for only 0-30 days. How does WCB compare to these other companies within the same industry? How would you assess WCB's ability to convert accounts receivable into cash? Regardless of whether there is a collection problem, how could the owners encourage customers to pay in a timelier manner? Page 120 days outstanding. Please outline the process you used to calculate these amounts. 6. The owners would appreciate some assistance in calculating the bad debt expense for the year. Industry benchmarks indicate that companies record bad debt expense as 1% of sales or the following percentages if the aging method is used: 0-30 Days Outstanding 5% 31-60 Days Outstanding 7.5% 61-90 Days Outstanding 10% 91-120 Days Outstanding 25% >120 Days Outstanding 50% WCB has not decided whether it is going to use the percentage of sales or the aging method. As such, the owners would like you to calculate the bad debt expense using both approaches. Please remember to explain your calculations. The owners would also like to know what factors that they should consider when determining the correct approach. 7. The loan officer at the bank has asked WCB to assess its ability to collect cash from its customers. This is important because the company needs cash flow in order to make the loan payments. The owners have done some research and have found that comparable companies report the following accounts receivable buckets: 0-30 Days Outstanding 75% 31-60 Days Outstanding 15% 61-90 Days Outstanding 5% 91-120 Days Outstanding 3% >120 Days Outstanding 2% The above percentages reflect the portion of accounts receivable that corresponds to each bucket. For example, these percentages can be interpreted as follows: if the comparable company has $1 million of accounts receivable, then $750,000 of this balance has typically been outstanding for only 0-30 days. How does WCB compare to these other companies within the same industry? How would you assess WCB's ability to convert accounts receivable into cash? Regardless of whether there is a collection problem, how could the owners encourage customers to pay in a timelier manner