Ask Question
3 January, 03:13

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 $5,800, 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 $1,600 were presented for redemption during 2021 for meals having a total price of $2,000. 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.

+2
Answers (1)
  1. 3 January, 03:26
    0
    Answer: $80

    Explanation:

    Total sales of gift cards for 2 months = $5,800

    redeemable within 2 years of purchase date

    assumed the percentage of gift cards are redeemed within one year

    = 70% of $5,800 = $4,060

    Actual gift card redeemed in 2021 = $1,600

    Actual sales of gift card redeemed = $2,000

    Balance of gift card not redeemed = $2,000 - $1,600 = $400

    sales tax rate = 4%

    accessed on $2,000 * 4%

    = $80

    Sales tax to be remitted in January for sales in November = $80
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Bavarian Bar and Grill opened for business in November 2021. During its first two months of operation, the restaurant sold gift cards in ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers