WorldBiz operates divisions around the world. Its European division-EuroBiz (EB)--has recently reported the following information to you at WorldBiz's head office. You are trying to decide whether to direct your internal audit staff to investigate more closely. From the Financial Statement Notes Year 5 Year 4 Year 3 Accounts Receivable (gross) $ 136,000 $ 77,000 $ 57,000 Allowance for Doubtful Accounts (6,800) (7.700) (5,700) Accounts Receivable, Net 129,200 69,300 51,300 Other Information Gathered Year 5 Year 4 Year 3 Net Sales Revenue $ 740,000 $ 695,000 $ 660,800 Accounts Receivable Write-offs 8,600 7,800 7,800 Bad Debt Expense 7,400 8,340 7,920 Sales Discounts (4/10, 1/30) 4,700 10,700 6,700 Required: 1-a. For each of the years, calculate the proportion of gross accounts receivable estimated to be uncollectible as allowed for in the Allowance for Doubtful Accounts. 1-b. Which year does not align with the other two? 2.a. For each of the years, calculate the proportion of Net Sales Revenue that Bad Debt Expense represents. 2.b. Which year does not align with the other two? 3-a. Did customers take greater (or lesser) advantage of sales discounts in Year 5 than in Year 4 and Year 3? 3-b. Does this indicate customers were more or less) likely to promptly pay their balances in Year 5 as compared to prior years? 4-a, Calculate the average days to collect in Year 5 and Year 4. 4-b. Does this measure indicate customers paid their balances faster (or slower) in Year 5 as compared to Year 4? 5. Indicate (yes or no) whether you should direct your internal audit staff to investigate EB's receivables management practices more closely ces Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Rea ZA Reg 28 Rea Reg 30 Req 4A Reg 48 Reg 5 closely Complete this question by entering your answers in the tabs below. Req 1A Reg 18 Req 2A Req 2B Req Reg 3B Req 4A Req 48 Reg 5 For each of the years, calculate the proportion of gross accounts receivable estimated to be uncollectible as allowed for in the Allowance for Doubtful Accounts. Year 5 Year 4 Year 3 Proportion of Gross Accounts Receivables % % MIA Reg 18 > lete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 2A Reg 2B Req Req 3B Reg 4A Reg 4B Reg 5 For each of the years, calculate the proportion of Net Sales Revenue that Bad Debt Expense represents. (Round your answers to 1 decimal place.) Year 5 Year 4 Year 3 Proportion of Net Sales Revenue % % Complete this question by entering your answers in the tabs below. Reg 4B Reg 1A Reg 1B Req 2A Req 2B Req 3A Reg 3B Req 4A Req 5 Calculate the average days to collect in Year 5 and Year 4. (Use 365 days in a year. Round your intermediate calculations to 1 decimal place.) Year 5 Year 4 Average days to collect days days
