Logan's Roadhouse opened a new restaurant in November. During its first two months of operation, the restaurant
sold gift cards in various amounts totaling $ The cards are redeemable for meals within one year of the
purchase date. Gift cards totaling $ were presented for redemption during the first two months of operation prior
to yearend on December The sales tax rate on restaurant sales is assessed at the time meals not gift cards
are purchased. Logan's will remit sales taxes in January.
Required:
& Record in summary form the $ in gift cards sold keeping in mind that, in actuality, each sale of a gift
card or a meal would be recorded individually and the $ in gift cards redeemed. Hint The $ includes a
sales tax of $
Determine the balance in the Deferred Revenue account remaining liability for gift cards to be reported on the
December balance sheet.
