Brooke Brothers Ltd has the following balance sheet information on 28 February 2019:

Accounts receivable: $300 000

Allowance for doubtful debts: $30 100

Accounts receivable net: $269 900

On 28 June 2019, the company receives notification from MJ Corporation that it has filed for bankruptcy. The controller of Brooke Brothers Ltd decides to write off MJ Corporation's account for $6 400.

Which of the following statements is true?

Select one:

a.Net income and net accounts receivable will decrease.

b.Net income will decrease, but no change will occur in net accounts receivable.

c.Neither net income nor net accounts receivable will decrease.

d.No change will occur in net income, but net accounts receivable will decrease.