GCM Corporation had a 1/1/14 balance in the Allowance for Doubtful Accounts of $25,000. During 2014, it wrote off $18,000 of accounts and collected $5,250 on accounts previously written off. The balance in Accounts Receivable was $500,000 at 1/1 and $600,000 at 12/31. At 12/31/14, GCM estimates that 5% of accounts receivable will prove to be uncollectible. What should GCM report as its Allowance for Doubtful Accounts at 12/31/14? a. $12,000. b. $12,250. c. $17,250. d. $30,000.

Question

Daniella Vaughan

Business

18 July, 04:03

GCM Corporation had a 1/1/14 balance in the Allowance for Doubtful Accounts of $25,000. During 2014, it wrote off $18,000 of accounts and collected $5,250 on accounts previously written off. The balance in Accounts Receivable was $500,000 at 1/1 and $600,000 at 12/31. At 12/31/14, GCM estimates that 5% of accounts receivable will prove to be uncollectible. What should GCM report as its Allowance for Doubtful Accounts at 12/31/14? a. $12,000. b. $12,250. c. $17,250. d. $30,000.

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Melina Vaughan · Answer 1

What should GCM report as its Allowance for Doubtful Accounts at 12/31/14?.

d. $30,000.

Explanation:

1/01/2014 Allowance 25000

Wrotte off - 18000

Account previously 5250

12250

1/01/2014 Account receivable 500000

31/12/2014 Account receivable 600000

%Uncollectible 5%

30000