A business has trade receivables of $52000$ at the year-end. The current provision for doubtful debts is $3000$. The provision for doubtful debts is to be kept at $5\%$ of trade receivables. What effect will adjusting the provision have?
- Aon profit: decrease by $2600$; on current assets: decrease by $400$
- Bon profit: decrease by $2600$; on current assets: decrease by $2600$
- Con profit: increase by $400$; on current assets: decrease by $400$
- Don profit: increase by $400$; on current assets: increase by $400$