Vandross Company has recorded bad debt expense in the past at a rate of 1% of net

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Vandross Company has recorded bad debt expense in the past at a rate of 1½% of net sales. In 2010, 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 €380,000 instead of €285,000. In 2010, bad debt expense will be €120,000 instead of €90,000. If Vandross’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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Intermediate Accounting

ISBN: 978-0470873991

IFRS Edition

Authors: kieso, weygandt and warfield.

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