Allowance for receivables and irrecoverable debts

The increase in the allowance together with the irrecoverable debt mean in increase in the expense of $1,000. An increase in the expense will decrease the profit.

Hi sir. I have a similar query. A company has trade receivables totalling $16,000 after writing off irrecoverable debts of $500, and a loss allowance brought forward of $2,000. The company wishes to carry forward a loss allowance equal to 5% of trade receivables. What will be the effect on profit of adjusting the allowance? A.$700 decrease B.$700 increase C.$1,200 decrease D.$1,200 increase my answer was 700 increase. 16000 * 0.05 = 800 so 1200 decrease in allowance this year (1200) + 500 = (700) so a decrese of 700 in expenses should increase the profit by 700 but the answer provided by acca study hub says 1200 increase (D). pls help me out.

You have posted this question twice, and I have just answered your other post :-)