Lou incurred the following business expenses during the year:

Penalty for breach of business contract $3,200

State sales tax penalty for late remittance $2,500

Rent expense $6,000

Office supplies $450

Early withdrawal penalty on investment account at a savings and loan $185

What are Lous allowable current-year deductions?

A. $6,635

B. $9,835

C. $12,150

D. $12,335