Ling, Inc. sold $50,000 of gift cards during 2021. Also during 2021, $45,000 of gift cards were redeemed, some of which were sold in 2021 and some of which were sold in the prior year. Ling also concluded that $2,500 of gift cards sold in the prior year would never be redeemed, and Ling finished 2021 with a balance of $12,500 in deferred revenue—gift cards. The beginning balance of deferred revenue (1/1/2021) was:
a. 12,500
b. 5,000
c. 10,000
d. cannot be determined