Your team inquires of other HUMI personnel this month and documents the following items.

COVID and the subsequent fears of a related economic recession showed an increase in sales in $2021,$ but a sharp decline in $2022.$ The business rebounded well in $2023.$ In an effort to improve sales, HUMI extended more generous credit terms to its customers. Beginning in the fourth quarter of $2022,$ customers were granted an additional $30$ days to pay their balances, so credit terms were extended from net $30$ days to net $60$ days. Days sales outstanding have increased slightly from approximately $47$ days in $2022$ to $61$ days in $2023.$

In $2022,$ HUMI began to sell directly to consumers using their internally developed online Sales Application. Online sales have little credit risk, as credit card companies must approve the charges before shipments are made. These sales are always settled in fewer than $30$ days with no issues with bad debt. The receivables balances for Online$-$based sales were $$8\mathrm{.}0$ million and $$10\mathrm{.}0$ million in $2022$ and $2023,$ respectively.

The allowance is estimated based on general expectations and historical losses for most accounts. The average credit score of customers in $2023$ is essentially unchanged from prior years. Except for a few large customers, the receivables are due from small, homogenous customers. For customers with balances higher than $$500,000,$ HUMI does not perform a more detailed analysis of the accounts, as historically this has not been an issue for the company. See the allowance analysis for details.

About $27\mathrm{.}3\%$ of the accounts receivable balance on December $31,2023,$ is over $91$ days old.

Based on a team discussion with the Senior VP of Sales, the following is a summary of customers with balances over $$500,000.$

Kaboom Kanucks Company accounts receivable balance is still largely outstanding from $2022$ sales. At December $31,2023$ a net balance of $$2\mathrm{.}7M$ is still outstanding.

Earlier in the year, Kaboom Kanucks Company management agreed to reduce the balance using payments of $$300,000$ per month starting in August $2023.$ They made the first three monthly payments. This allowed HUMI to restart total sales of $$200,000$ in early November $2023.$ However, the payments due in November $2023,$ December $2023$ and January $2024$ have not yet been received, nor have any payments on the sales made in November.

Kaboom Kanucks management has not returned the credit manager's phone calls. On December $31,2023,$ the outstanding balance that was $31$ to $60$ days old was included in the allowance estimate at the same general percentage as all other receivables in this aging category across the company.

A new customer in $2021,$ Smacken Kraken Inc, has always paid its amounts due after selling the product to consumers. On December $31,2022,$ the total outstanding balance is $$8\mathrm{.}0$ million. Of this, $$3\mathrm{.}0$ million is over $120$ days old; $$2\mathrm{.}0$ million is $91$ to $120$ days old; and $$3\mathrm{.}0$ million is $31$ to $60$ days old. HUMI continues to receive payments from Smacken Kracken and all amounts over $120$ days old on December $31,2022$ were collected in January $2023.$ HUMI made no