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Recently, Galaxy Corporation lowered its allowance for doubtful accounts by reducing bad debt expense from 2% of sales to 1% of sales. Ignore taxes.

Recently, Galaxy Corporation lowered its allowance for doubtful accounts by reducing bad debt expense from 2% of sales to 1% of sales. Ignore taxes. Required: a. What are the immediate effects on operating income? bad debt expense will result in operating income. b. What are the immediate effects on operating cash flow? bad debt expense will have operating cash flow.

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