Texas Roadhouse opened a new restaurant inOctober. During its first three months of operation, the restaurantsold gift cards in various amounts totaling $1,700. The cards areredeemable for meals within one year of the purchase date. Giftcards totaling $624 were presented for redemption during the firstthree months of operation prior to year-end on December 31. Thesales tax rate on restaurant sales is 4%, assessed at the timemeals (not gift cards) are purchased. Texas Roadhouse will remitsales taxes in January.
Required:
1. & 2. Record (in summary form) the$1,700 in gift cards sold (keeping in mind that, in actuality, thefirm would record each sale of a gift card individually) and the$624 in gift cards redeemed. (Hint: The $624 includes a 4%sales tax of $24.) (If no entry is required for atransaction/event, select "No Journal Entry Required" in the firstaccount field.)
Texas Roadhouse Opened A New Restaurant In October During Its First Three Months Of Operation The Restaurant Sold Gift 1 (13.38 KiB) Viewed 9 times
Texas Roadhouse Opened A New Restaurant In October During Its First Three Months Of Operation The Restaurant Sold Gift 2 (13.57 KiB) Viewed 9 times
3. Determine the balance in the DeferredRevenue account (remaining liability for gift cards) TexasRoadhouse will report on the December 31 balance sheet.
Texas Roadhouse Opened A New Restaurant In October During Its First Three Months Of Operation The Restaurant Sold Gift 3 (6.19 KiB) Viewed 9 times
Journal entry worksheet < 1 2 Record the cash received for gift cards. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal >
Journal entry worksheet 1 2 < Record the redemption of gift cards. Note: Enter debits before credits. Transaction 2 Record entry General Journal Clear entry Debit Credit View general journal >
3. Determine the balance in the Deferred Revenue account (remaining liability for gift cards) Texas Roadhouse will report on the December 31 balance sheet. Deferred revenue
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