Answer:
1)
Sale of gift cards
Debit Bank $6,800 Credit Gift Card Certificate liability $6,800
Redemption of cards
Debit Gift card liability $2,100 Debit Bank $500 Credit Revenue $2,500 Credit sales tax payable 100
2) Liability to be reported in balance sheet = ( 6800-2100) = $4,700
3) Non current liabilities
Gift Card certificate $680
Current Liability
Gift Cards Certificates $4,020
Sale tax payable $100
Explanation:
Sales tax payable (2500*4%) = $100
The bank of $500 in the Redemption of cards journal is a balancing figure.
Classification of the liability in types of liability
Current liability
Gift card certificates sold = 6800
current liability 90% =6120
deduct redeemed card = -2100
current liability = $4,020
Non_Current Liabilities
Gift Card not yet redeemed = 4700
less current gift card liability = -4020
non current liability =680
