Gowns, Inc

Gowns, Inc.uses the percentage of receivables basis to estimate its bad debts.At December 31, 2011, Gowns estimates total bad debts that will become uncollectible in the future as €4,456.The existing balance in the Allowance for Doubtful Accounts is a debit balance of €1,056.The Accounts Receivable balance at December 31, 2011 is €79,200.The amount of the bad debts adjusting entry at December 31, 2011 will impact the statement of financial position by

A) Increasing expenses by €4,456.
B) Increasing the Allowance fro Doubtful Accounts by €5,512.
C) Increasing the Allowance for Doubtful Accounts by €4,456.
D) Increasing the Allowance for Doubtful Accounts by €3,400.