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Business, 15.10.2019 18:00 caschmitt3821

Wildhorse company has recorded bad debt expense in the past at a rate of 1.5% of accounts receivable, based on an aging analysis. in 2020, wildhorse decides to increase its estimate to 2%. if the new rate had been used in prior years, cumulative bad debt expense would have been $407,000 instead of $305,250. in 2020, bad debt expense will be $132,000 instead of $99,000. if wildhorse’s tax rate is 30%, what amount should it report as the cumulative effect of changing the estimated bad debt rate?

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Wildhorse company has recorded bad debt expense in the past at a rate of 1.5% of accounts receivable...
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