Question

National bullying .. Puzzles P Bullying Find A P.. Address work 2-Chapter 13 Saved Exercise 13-6 (Algo) Gift cards; sales taxes (LO13-3] Bavarian Bar and Grill opened for business in November 2021. During its first two months of operation, the restaurant sold gift cards in various amounts totaling $7,200, mostly as Christmas presents. They are redeemable for meals within two years of the purchase date, although experience within the industry indicates that 80% of gift cards are redeemed within one year. Gift cards totaling $2,300 were presented for redemption during 2021 for meals having a total price of $2,700. The sales tax rate on restaurant sales is 4%, assessed at the time meals (not gift cards) are purchased. Sales taxes will be remitted in January Required: 1. Prepare the appropriate journal entries (in summary form) for the gift cards and meals sold during 2021(keeping in mind that, in actuality, each sale of a gift card or a meal would be recorded individually). 2. Determine the liability for gift cards to be reported on the December 31, 2021, balance sheet. 3. What is the appropriate classification (current or noncurrent) of the liabilities at December 31, 2021? ak aces Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the appropriate journal entries (in summary form) for the gift cards and meals sold during 2021 (keeping in mind that, in actuality, each sale of a gift card or a meal would be recorded individually). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list < Prey 3 of 10 Next > doc Online Course Sch.xlsx Online Course Schlsx A Q Tucker MaEFT10e...ppbe ECON 222 SEC 01.doc Minda to search O

Answer 1

Ans 1.
Bavarian Bar And Grill
Particulars	Amt
Price of Meals Sold in 2021	$                2,700
Sales Tax @4% on Meal Price	$                   108
Total Meal Price	$                2,808
Gift Card redeemed for Meal	$                2,300
Cash Payment made =2808-2300=	$                   508

	Journal Entries
Sr No	Account Title	Dr $	Cr $
1	Cash	7,200
	Deferred Revenue		7,200
	Sale of Gift cards
2	Cash	508
	Deferred Revenue	2,300
	Sales Revenue		2700
	Sales Tax Payable		108
	Recording Meals and Gift card redemption

Ans 2.	Amt $
Gift Card Sold =Total Liability	7,200
Current Laibility @80% =	5,760
Less Gift Card redeemed within Dec 31,2021	2,300
Current Laibility outstanding on Dec 31,2021	3,460
Non Current Liability on Dec 31,2021@20% of Initial Liability=20%*7200=	1,440.0

So Total Gift Card Liability on Dec31,2021=$3460+$1440=

4,900.0

Ans 3.
Classification of Liabilities as on Dec 31,2021
Sales Tax Liability-Current	108
Sales Tax Liability -Non Current	NIL
Liability Gift Card and Meals -Current	3,460
Liability Gift Card and Meals -Non Current	1,440.0