Cumulative effect of changing the estimated bad debt rate

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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 estimate to 2%. If the new rate had been used in prior years, cumulative bad debt expense would have been $382,680 instead of $298,650. In 2014, bad debt expense will be $126,990 instead of $91,500. If Vandross’s tax rate is 28%, what amount should it report as the cumulative effect of changing the estimated bad debt rate?

Reference no: EM13747307

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