Question: At December 3 1 , 2 0 2 5 , Sorrento Inc. estimated bad debts as 3 % of the outstanding balance of Accounts Receil

At December 31,2025, Sorrento Inc. estimated bad debts as 3% of the outstanding balance of Accounts Receil 2026, Sorrento determined that it should increase its estimate to 6.5%. This change is handled on a
cumulative basis.
prospective basis.
retrospective basis.
speculative basis.
At December 3 1 , 2 0 2 5 , Sorrento Inc.

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