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On December 5, 2016, Super Circuit Store sold gift certificates totaling $12,000. By December 31, 2016, all but $2,125 worth of these certificates had been redeemed for merchandise. Outstanding certificates were then redeemed by January 15, 2017.

Required:

1.	Prepare journal entries on Super Circuits books to reflect the preceding transactions.
2.	How would the gift certificates be reported on Super Circuits balance sheet on December 31, 2016?

CHART OF ACCOUNTS
Super Circuit Store
General Ledger
ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 189 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings	REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense

Prepare journal entries on Super Circuits books to reflect the gift certificate transactions in December and January. Include any year-end adjustments related to the gift certificate transactions.

PAGE 9

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6

How would the gift certificates be reported on Super Circuits balance sheet on December 31, 2016?

Super Circuit Store

Partial Balance Sheet

December 31, 2016

1	Current Liabilities:
2

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