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Vandross Company has recorded bad debt expense in the past at a rate of 1.5% of net sales. In 2014, Vandross decides to increase its
Vandross Company has recorded bad debt expense in the past at a rate of 1.5% of net sales. In 2014, Vandross decides to increase its estimate to 2%. If the new rate had been used in prior years, cumulative bad debt expense would have been $398,750 instead of $291,370. In 2014, bad debt expense will be $125,590 instead of $92,740. If Vandross's tax rate is 28%, what amount should it report as the cumulative effect of changing the estimated bad debt rate? The cumulative effect of changing the estimated bad debt rate
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