Answer:
A.
Dr Cash 7,200
Cr Deferred revenue 5
7,200
Dr Cash 508
Dr Deferred revenue 2,300
Cr Sales revenue 2,700
Cr Sales taxes payable 108
B.$4,900
C.Sales tax liability - current $108
Sales tax liability - noncurrent nothing
Liability gift certificates - current$ 3,460
Liability gift certificates – noncurrent$1,440
Explanation:
Bavarian Bar and Grill Journal entries
Dr Cash 7,200
Cr Deferred revenue 5
7,200
Dr Cash 508
($2,700 + $108 – $2,300)
Dr Deferred revenue 2,300
Cr Sales revenue 2,700
Cr Sales taxes payable 108
($2700×4%)
Liability for gift certificates to be reported on the December 31, 2021, balancesheet.
7,200- 2,300
Liabilities=4,900
Appropriate amount for each classification (current or noncurrent) of the liabilities at December 31, 2021
Sales tax liability - current$108
Sales tax liability - noncurrent nothing
Liability gift certificates - current$ 3,460
Liability gift certificates – noncurrent$1,440
Gift certificates sold$ 7,200 × 80%
Estimated current liability$ 5,760
Gift certificates redeemed(2,300)
Current liability at December 31$ 3,460
Noncurrent liability at December 31 ($7,200 × 20%)1,440
Total$ 4,900
