1.Botanical Spas sells $2,500 worth of gift certificates in November and December. 25% of the gift certificates are redeemed in December prior to the December 31 year end. The required year-end adjusting entry is

a.Dr. Revenues $625, Cr. Gift Card Liability $625.

b.Dr. Revenues $1,875, Cr. Gift Card Liability $1,875.

c.Dr. Gift Card Liability $625, Cr. Revenues $625.

d.Dr. Gift Card Revenues $1,875, Cr. Revenues $1,875.

2.Bank indebtedness includes all of the following, except for

a.bank overdraft.

b.line of credit.

c.revolving credit facilities.

d.current portion of long-term debt.

3.Radio Hut Inc. offers a two-year assurance warranty against failure of its products. The estimated liability is 1.5% in the year of sale and 3% in the second year. Sales and actual warranty expense for 2020 and 2021 were:

	Sales	Actual Warranty Costs Incurred During Year
2020	$3,500,000	$110,000
2021	$3,900,000	$195,000

The warranty provision on the December 31, 2021 statement of financial position sheet was

a.$0.

b.$28,000.

c.$138,000.

d.$175,500.