Problem 8-6B Record deferred revenues and sales taxes (LO8-4)
Logans Roadhouse opened a new restaurant in November. During its first two months of operation, the restaurant sold gift cards in various amounts totaling $1,350. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $742 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.
Problem 8-6B Record deferred revenues and sales taxes (LO8-4) Logan's Roadhouse opened a new restaurant in November. During its first two months of operation, the restaurant sold gift cards in various amounts totaling $1,350. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $742 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. Logan's will remit sales taxes in January. Required: 1. & 2. Record (in summary form) the $1,350 in gift cards sold (keeping in mind that, in actuality, each sale of a gift card or a meal would be recorded individually) and the $742 in gift cards redeemed. (Hint The $742 includes a 6% sales tax of $42.) (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 Record the cash received for gift cards Note: Enter debits before credits. General Journal Credit Transaction Debit 1 View transaction list Journal entry worksheet 1 2 Record the cash received for gift cards. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal Journal entry worksheet 1 2 Record the redemption of gift cards. Note: Enter debits before credits. Transaction General Journal Debit Credit 2 3. Determine the balance in the Deferred Revenue account (remaining liability for gift cards) to be reported on the December 31 balance sheet Deferred revenue Problem 8-6B Record deferred revenues and sales taxes (LO8-4) Logan's Roadhouse opened a new restaurant in November. During its first two months of operation, the restaurant sold gift cards in various amounts totaling $1,350. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $742 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. Logan's will remit sales taxes in January. Required: 1. & 2. Record (in summary form) the $1,350 in gift cards sold (keeping in mind that, in actuality, each sale of a gift card or a meal would be recorded individually) and the $742 in gift cards redeemed. (Hint The $742 includes a 6% sales tax of $42.) (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 Record the cash received for gift cards Note: Enter debits before credits. General Journal Credit Transaction Debit 1 View transaction list Journal entry worksheet 1 2 Record the cash received for gift cards. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal Journal entry worksheet 1 2 Record the redemption of gift cards. Note: Enter debits before credits. Transaction General Journal Debit Credit 2 3. Determine the balance in the Deferred Revenue account (remaining liability for gift cards) to be reported on the December 31 balance sheet Deferred revenue
