10.

Texas Roadhouse opened a new restaurant in October. During its first three months of operation, the restaurant sold gift cards in various amounts totaling $1,500. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $416 were presented for redemption during the first three months of operation prior to year-end on December 31. The sales tax rate on restaurant sales is 4%, assessed at the time meals (not gift cards) are purchased. Texas Roadhouse will remit sales taxes in January Required: 1. & 2. Record (In summary form) the $1,500 In gift cards sold (keeping in mind that, in actuality, the firm would record each sale of a gift card individually) and the $416 in gift cards redeemed. (Hint The $416 includes a 4% sales tax of $16.) (if no entry is required for a transaction/event, select "No Journal Entry Required" In the first account field.) Answer is complete but not entirely correct. No Transaction Debit Credit 1 General Journal Cash Unemployment Tax Payable 1,500 1,500 2 2 416 Unemployment Tax Payable Sales Tax Payable Sales Revenue 0 16 400 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