1. Leni Company has recorded bad debts expense in the past at a rate of 1.5% of net sales. In 2019, Leni decides to increase its estimate to 2%. If the new rate had been used in prior years, cumulative bad debt expense would have been P380,000 instead of P285,000. In 2019, bad debts expense will be P120,000 instead of P 90,000.

Required:

1. What amount of bad debts should the company report in its statement of comprehensive income as a result of change in estimate?
2. Assuming that Accounts receivable at the end of 2019 has a balance of P600,000, how much is the net realizable value after considering the change in estimate