wo years ago a customer was approved for an unusually large credit sale of $7M over the objections of the credit and collections department. Shortly after the sale the customers business began to deteriorate due to an unexpected recession. To date it has paid only $2M against the order despite the fact that it has consumed all of the material purchased. The collections department has worked diligently to collect the remaining $5M without success. The customer filed for bankruptcy this morning with essentially no assets to pay a large number of creditors. Evaluate the financial statement impact of the bankruptcy on Canaday. Assume Canadays product cost is 40% of revenue and the bad debt reserve of $3M will be fully reestablished.