A business starts its year with £800 in a provision for doubtful debts. At the end of the year, trade receivables total £12,000 of which £600 are considered doubtful. What is the effect on the income statement and statement of financial position?

(a) £200 is added to profit and the statement of financial position shows trade receivables less provision as £11,400

(b) £600 is deducted from profit and the statement of financial position shows trade receivables less provision as £11,400

(c) £1,400 is deducted from profit and the statement of financial position shows trade receivables less provision as £10,600

(d) £800 is added to profit and the statement of financial position shows trade receivables less provision as £11,400