Mug drank merrily after cheers (7)
I believe the answer is:
tankard
'mug' is the definition.
(I've seen this before)
'drank merrily after cheers' is the wordplay.
I cannot really understand how this works, but
an anagram of 'drank' is 'nkard' which is located in the answer.
'cheers' could be 'ta' (both can informally mean thank you) and 'ta' is located in the answer.
This accounts for all the letters.
This explanation may well be incorrect...
Can you help me to learn more?
(Other definitions for tankard that I've seen before include "One-handled beer mug" , "Mug-like drinking vessel" , "Beer-glass" , "Drinking vessel with a handle" , "Metal beer mug" .)