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Tamarisk Company has recorded bad debt expense in the past at a rate of 1.5%...

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Accounting

Tamarisk Company has recorded bad debt expense in the past at a rate of 1.5% of accounts receivable, based on an aging analysis. In 2025, Tamarisk decides to increase its estimate to 2%. If the new rate had been used in prior years, cumulative bad debt expense would have been $416,600 instead of $312,450. In 2025, bad debt expense will be $109,600 instead of $82,200. If Tamarisk'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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