Managers from Cloud Ltd. have received the information that it is likely that one of its customers which represent 25%25% of trade receivables will not pay. The balance of trade receivables equals 135,200135,200. In addition, the current balance of insurance expense includes an amount of 4,2504,250 that corresponds to the next accounting period. After considering the two journal entries related to the two economic transactions, which of the following statements is true?

a.

Cloud Ltd. decreases assets by 29,55029,550 and increases expenses in the same quantity.

b.

Cloud Ltd. decreases assets by 33,80033,800, decreases expenses by 4,2504,250 and increases liabilities by 33,80033,800.

c.

Cloud Ltd. increases assets by 29,55029,550 and increases liabilities in 4,2504,250.

d.

None of the answers is true.