During its first three months of operation, Palimino's sold gift cards in various amounts totaling $5,200. The gift cards are redeemable for meals within one year of the purchase date. Gift cards totaling $1,900 were presented for redemption prior to year-end on December 31. The sales tax rate on restaurant sales is 7%, assessed at the time meals (not gift cards) are purchased. Palimino's will remit sales taxes in January.Required:1. Record (in summary form) the $5,200 in gift cards sold (keeping in mind that, in actuality, each sale of a gift card or a meal would be recorded individually).2. Record the $1,900 in gift cards redeemed. The $1,900 includes a 7% sales tax of $124.30.3. Determine the balance in the deferred revenue account (remaining liability for gift cards) to be reported on
the December 31 balance sheet.
What will be an ideal response?
Requirement 1
| Cash | 5,200 | ? |
| Deferred Revenue | ? | 5,200 |
Requirement 2
| Deferred Revenue | 1,900 | ? |
| Sales ($1,900/1.07) | ? | 1,775.70 |
| Sales Tax Payable | ? | 124.30 |
Requirement 3
| Deferred Revenue |
| 1,900 | 5,200 | ? |
| ? | 3,300 | Balance |
You might also like to view...
________ refers to an extraneous variable attributable to the loss of test units while the experiment is in progress
A) Mortality B) Interactive testing effect C) Maturation D) Main testing effect
In ANOVA the relative contribution of a factor X is calculated as ________
A) ?2 x = B) ?2 x = C) ?2 x = D) ?2 x =
How should you end your Q&A session?
a. Abruptly b. Slowly c. By thanking the audience d. By pointing out what the audience could have asked
Rosewood Company made a loan of $9600 to one of the company's employees on April 1, Year 1. The one-year note carried a 6% rate of interest. What is the amount of interest revenue that Rosewood would report in Year 1 and Year 2, respectively?
A. $432 in Year 1 and $144 in Year 2 B. $576 in Year 1 and $0 in Year 2 C. $144 in Year 1 and $432 in Year 2 D. $0 in Year 1 and $576 in Year 2