If HOTEL’s tax rate is 30%, what amount should it report as bad debts expense in the income statement as an effect of change? HOTEL Company has recorded bad debts expense in the past at a rate of 1.5% of net sales. In2022, HOTEL decides to increase its estimate to 2%. If the new rate had been used in prioryears, cumulative bad debts expense would have been P380,000 instead of #285,000. In 2022,bad debts expense will be P120,000 instead of P90,000.

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Description: If HOTEL’s tax rate is 30%, what amount should it report as bad debts expense in the income statement as an effect of change? HOTEL Company has recorded bad debts expense in the past at a rate of 1.5% of net sales. In2022, HOTEL decides to increase i

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If HOTEL’s tax rate is 30%, what amount should it report as bad debts expense in the income statement as an effect of change

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 18MC: Michelle Company reports $345,000 in credit sales and $267,500 in accounts receivable at the end of...

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