4. Arabica Co. estimates that 5% of its receivable will become uncollectible. Relevant information follows: Accounts receivable, Jan. 1 40,000 Net credit sales 135,000 Collections from customers (excluding recoveries) 70,000 Allowance for doubtful accounts, Jan. 1 5,000 Write-offs 2,500 Recoveries 500 Percentage of receivables 5% Requirements: Compute for the (a) Bad debt expense and (b) Net realizable value of accounts receivable