Before any end-of-year adjustments had been made, the trial balance of a business at 31 May 2004 included the following.

At 31 May 2004 it was found that debtors included a bad debt of $650. It was decided to adjust the Provision for Doubtful Debts to 4% of debtors. A debt of $420, which had been written off as bad in January 2003, was recovered in January 2004. What was the effect of these events on the Profit and Loss Account for the year ended 31 May 2004? 

A. Credit $10 

B. Debit $10 

C. Credit $36 

D. Debit $36

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Trade debtors Provision for Doubtful Debts Debit Credit $ $ 13 400 730