Provision adjustment requires opening balance, which is missing

Steps:

• Calculate required closing provision: 5% × $5,000 =$250 (note: stated $500 conflicts with this).
• Identify irrecoverable debt write-off: $100, typically expensed separately (Dr Bad debt expense, Cr Receivables) or from existing provision (no profit impact).
• Determine adjustment to provision: closing provision – opening provision (affects profit via bad debt expense).
• Opening provision not provided (cannot assume prior rate or balance from $4,000 receivables alone).

Why A is correct:

• Not applicable; insufficient data to compute $750 or any specific decrease.

Why the others are wrong:

• B: No basis for $800 without opening balance.
• C: No basis for $1,250 without opening balance.
• D: No basis for $1,200 without opening balance.

Not enough information.

Final answer: Not enough information.