5 Texas Roadhouse opened a new restaurant in October. During its first three months of operation, the restaurant sold gift cards in various amounts totaling $2,900. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $520 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. Required: 1. & 2. Record (in summary form) the $2,900 in gift cards sold (keeping in mind that, in actuality, the company would record each sale of a gift card individually) and the $520 in gift cards redeemed. (Hint. The $520 includes a 4% sales tax of $20.) 3. Determine the balance in the Deferred Revenue account (remaining liability for gift cards) Texas Roadhouse will report on the December 31 balance sheet.

5 Texas Roadhouse opened a new restaurant in October. During its first three months of operation, the restaurant sold gift cards in various amounts totaling $2,900. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $520 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. Required: 1. & 2. Record (in summary form) the $2,900 in gift cards sold (keeping in mind that, in actuality, the company would record each sale of a gift card individually) and the $520 in gift cards redeemed. (Hint. The $520 includes a 4% sales tax of $20.) 3. Determine the balance in the Deferred Revenue account (remaining liability for gift cards) Texas Roadhouse will report on the December 31 balance sheet.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 7MCQ

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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 $1,750. 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. Logan’s will remit sales taxes in January. Required: 1. & 2. Record (in summary form) the $1,750 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 $636 in gift cards redeemed. (Hint: The $636 includes a 6% sales tax of $36.) (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Record the cash received for gift cards. Transaction General Journal Debit Credit…
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 $1,750. 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. Logan’s will remit sales taxes in January. Required: 1. & 2. Record (in summary form) the $1,750 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 $636 in gift cards redeemed. (Hint: The $636 includes a 6% sales tax of $36.) (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Record the cash received for gift cards. Transaction General Journal Debit Credit 1…
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 $2,300. 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. Record (in summary form) the $2,300 in gift cards sold (keeping in mind that, in actuality, each sale of a gift card or a meal would be recorded individually).2. Record the $742 in gift cards redeemed. (Hint: The $742 includes a 6% sales tax of $42.)3. Determine the balance in the Deferred Revenue account (remaining liability for gift cards) to be reported on the December 31 balance sheet.
Texas Roadhouse opened a new restaurant in October. During its first three months of operation, the restaurant sold gift cards in various amounts totaling $3,500. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $728 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.Required:1. Record (in summary form) the $3,500 in gift cards sold (keeping in mind that, in actuality, the firm would record each sale of a gift card individually).2. Record the $728 in gift cards redeemed. (Hint: The $728 includes a 4% sales tax of $28.)3. Determine the balance in the Deferred Revenue account (remaining liability for gift cards) Texas Roadhouse will report on the December 31 balance sheet.
es Texas Roadhouse opened a new restaurant in October. During its first three months of operation, the restaurant sold gift cards in various amounts totaling $2,500. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $728 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. Required: 1. & 2. Record (in summary form) the $2,500 in gift cards sold (keeping in mind that, in actuality, the company would record each sale of a gift card individually) and the $728 in gift cards redeemed. (Hint: The $728 includes a 4% sales tax of $28.) 3. Determine the balance in the Deferred Revenue account (remaining liability for gift cards) Texas Roadhouse will report on the December 31 balance sheet. Complete this question by entering your answers in the…
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Bavarian Bar and Grill opened for business in November 2021. During its first two months of operation, the restaurant sold gift cards in various amounts totaling $7,000, mostly as Christmas presents. They are redeemable for meals within two years of the purchase date, although experience within the industry indicates that 70% of gift cards are redeemed within one year. Gift cards totaling $2,200 were presented for redemption during 2021 for meals having a total price of $2,600. The sales tax rate on restaurant sales is 4%, assessed at the time meals (not gift cards) are purchased. Sales taxes will be remitted in January.Required:1. Prepare the appropriate journal entries (in summary form) for the gift cards and meals sold during 2021 (keeping in mind that, in actuality, each sale of a gift card or a meal would be recorded individually).2. Determine the liability for gift cards to be reported on the December 31, 2021, balance sheet.3. What is the appropriate classification (current or…
Bavarian Bar and Grill opened for business in November 2021. During its first two months of operation, the restaurant sold gift cards in various amounts totaling $5,200, mostly as Christmas presents. They are redeemable for meals within two years of the purchase date, although experience within the industry indicates that 80% of gift cards are redeemed within one year. Gift cards totaling $1,300 were presented for redemption during 2021 for meals having a total price of $2,100. The sales tax rate on restaurant sales is 4%, assessed at the time meals (not gift cards) are purchased. Sales taxes will be remitted in January. Required: 1. Prepare the appropriate journal entries (in summary form) for the gift cards and meals sold during 2021 (keeping in mind that, in actuality, each sale of a gift card or a meal would be recorded individually). 2. Determine the liability for gift cards to be reported on the December 31, 2021, balance sheet. 3. What is the appropriate classification (current…
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The store sold 28 gift cards for $100 per card. at year-end, 23 of the gift cards are redeemed. Shamrock expects three of the cards to expire unused. Record the redemption and expected breakage revenue.
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