Texas Roadhouse opened a new restaurant in October. During its first three months of operation, the restaurant sold gift cards in various amounts totaling $2,800. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $624 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.

1. & 2. Record (in summary form) the $2,800 in gift cards sold (keeping in mind that, in actuality, the company would record each sale of a gift card individually) and the $624 in gift cards redeemed. (Hint: The $624 includes a 4% sales tax of $24.) 3. Determine the balance in the Deferred Revenue account (remaining liability for gift cards) Texas Roadhouse will report on the December 31 balance sheet.

1. + 2. Record (in summary form) the $2,800 in gift cards sold (keeping in mind that, in actuality, the company would record each sale of a gift card individually) and the $624 in gift cards redeemed. (Hint: The $624 includes a 4% sales tax of $24.) (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

3. Determine the balance in the Deferred Revenue account (remaining liability for gift cards) Texas Roadhouse will report on the December 31 balance sheet.