Quaresmas corporation had a 01/01/2012 balance in the allowance for doubtful account of 15,000. During 2012 it wrote off 10,800 of accounts and collected 3,150 on account previously written off. The balance in account receivable was 300,000 at 01/01/2012 and 360,000 at 12/31

Credit sales revenue during 2012 is 70,000

Quaresma has two options to estimate uncollectibles

Option 1: Quaresma estimates 3 percents of account receivable will become uncollectible

Option 2: Quaresma estimates 4 percents credit sales will become uncollectible

a. Which option will result in higher net income for 2012 and how much?

b. Which option will in higher net realizable value of accounts receivable on 12/312012 and how much