Diamond Depot sold 57,000 of gift cards during the current year, and recieved cash. Diamond uses the proportional method for accounting for gift card breakage. Based on historical experience, it estimates a breakage percentage of 12% of its gift cards sales. During the year, customers redeemed 46,300 of girft cards purchasing inventory costing 28,000 the company uses a perpetual inventory system.

A) Prepare the journal entries required to record the gift card activity

B) What is the year end liability for gift cards was 15,500 at the beginning of the year?