Question
Logans Roadhouse opened a new restaurant in November. During its first two months of operation, the restaurant sold gift cards in various amounts totaling $1,300.
Logans Roadhouse opened a new restaurant in November. During its first two months of operation, the restaurant sold gift cards in various amounts totaling $1,300. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $636 were presented for redemption during the first two months of operation prior to year-end on December 31. The sales tax rate on restaurant sales is 6%, assessed at the time meals (not gift cards) are purchased. Logans will remit sales taxes in January.
Determine the balance in the Deferred Revenue account (remaining liability for gift cards) to be reported on the December 31 balance sheet.
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