Final answer:
The allowance for doubtful accounts as a percentage of gross accounts receivable for the year 2021 is 2.5% and for the year 2020 it is 2.67%.
Step-by-step explanation:
To calculate the allowance for doubtful accounts to gross accounts receivable, you need to divide the allowance for doubtful accounts by the gross accounts receivable and then multiply the result by 100 to get the percentage.
For the year 2021, the allowance for doubtful accounts is $500,000 and the gross accounts receivable is $20,000,000. So, the calculation would be: ($500,000 / $20,000,000) * 100 = 2.5%.
For the year 2020, the allowance for doubtful accounts is $400,000 and the gross accounts receivable is $15,000,000. The calculation would be: ($400,000 / $15,000,000) * 100 = 2.67%.