Determine the Amount of the Adjustment for Bad Debts Given

question 15

Short Answer

Determine the amount of the adjustment for bad debts given:
Bad debts are estimated to be 3% of credit sales
$\begin{array}{lr}\text { Accounts receivable balance } & \$ 600,000 \\\text { Allowance for bad debts balance (credit) } & \$ 200 \\\text { Net Credit Sales } & \$ 215,000\\\$\end{array}$

---

Definitions:

Fiscal Policy

The use of government spending and taxation to stabilize the economy.

Economic Indicators

Statistical metrics that help assess the overall health and direction of an economy, guiding investment and policy decisions.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to estimate inflation.

Stock Price Index

A stock price index measures the value changes of a specified set of stocks, representing a segment of the stock market, to understand market trends and investment performance.