A trader had the following closing trade receivables.
He usually provides for doubtful debts at the rate of 5%. At the end of year 2 he forgot to adjust the provision.
What was the effect on profit in year 3 of forgetting to adjust the provision in year 2?

$\$ 800{\text{ }}decrease$
2 )
$\$ 800{\text{ }}increase$
3 )
$\$ 1300{\text{ }}decrease$
4 )
$\$ 1300{\text{ }}increase$
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