1. Decoremore.ca sells various home decoration items online. The company also sells gift cards that can be used to purchase items from the Decoremore.ca website. These cards cannot be redeemed for cash. At the beginning of 2019, Decoremore.ca had a balance of $175,000 in its gift card liability account. During 2019, it sold $350,000 in gift cards and $160,000 worth of gift cards were redeemed for merchandise that cost Decoremore.ca $85,000. It is estimated that 3% of the gift card liability at the end of 2019 wont be redeemed by customers. a. Prepare the journal entries to record to sale of gift cards and redemption of gift cards in 2019 b. Record the yearend adjusting entry to record the gift cards that wont be redeemed. c. What is the 2019 year-end balance in the gift card liability account after the above adjusting entry? d. How would the sale of gift cards affect the companys current ratio? 2. Explain and discuss two accounting policies of how a company could manage earnings in the current year. 3. Gibco Limited has an October 31 year end. On October 1, 2020 Gibco had the following current liabilities listed on its books: Bank credit line ................................................ $23,250 Accounts payable ............................................. 100,500 CPP, EI and income tax payable ...................... 9,620 Unearned revenues ........................................... 12,000 During October 2020 Gibco engaged in the following transactions: Oct 1 Paid $20,000 on the line of credit with their bank to replace the bank overdraft. Oct 5 Sold goods worth $30,000 on which they had previously received a $12,000 deposit. The balance is due in 30 days. Oct 12 Bought $20,000 of inventory on credit, terms of 30 days. Oct 15 Paid amounts due the Government of Canada for the payroll amounts outstanding from September 30. Oct 20 Paid $87,000 owing to a supplier. Oct 21 Received $5,000 from a client for work that will be performed in January 2021. Oct 21 Sold $56,000 of goods half for cash, half on credit. Oct 30 Paid the monthly payroll amounts to employees. The gross payroll was $16,200. Amounts withheld from the employees' cheques were as follows: Canada pension plan premiums (CPP) $802 Employment insurance premiums (EI) $259 Income tax $2,800 At this time, the company also recorded their liability for amounts due to the government for CPP and EI. Oct 31 Declared $5,000 of dividends payable next year. Instructions a) Prepare all of the journal entries required as a result of the above transactions. b) Prepare the current liabilities section of the statement of balance sheet at October 31, 2020.