What is the impact on gamestop financial statements

Assignment Help Accounting Basics
Reference no: EM132824728

Gamestop Corp. said the following about its gift card sales in its most recent (2019) annual report:

"We establish a liability upon the issuance of merchandise credits and the sale of gift cards. Revenue is subsequently recognized when the credits and gift cards are redeemed."

Problem 1: When Gamestop sells merchandise to a customer who is using a Gamestop gift card to purchase the merchandise, what is the impact on Gamestop's financial statements? (Ignore any inventory effects)

a. Liabilities decrease and cash decreases

b. Liabilities increase and the Income Statement decreases

c. Liabilities decrease and the Income Statement increases

d. Liabilities decrease and cash decreases

e. No effect because the transaction was already booked when the customer purchased the gift card

Reference no: EM132824728

Questions Cloud

Which is true regarding to an operating lease : Which of the following is true regarding to an operating lease? the lessor may classify the lease contract as a sale type lease and record a corresponding sales
Which is true regarding to an operating lease : Which of the following is true regarding to an operating lease? the lessor may classify the lease contract as a sale type lease and record a corresponding sales
What is an example of a direct labor budget : Each of these calls takes about two minutes. What is an example of a direct labor budget, in hours, for the fundraising call-a-thon
How the hris enhances business throughout the company : Define its benefits and its limitations and how the HRIS enhances business throughout the company.
What is the impact on gamestop financial statements : What is the impact on Gamestop's financial statements? When Gamestop sells merchandise to a customer who is using a Gamestop gift card to purchase merchandise.
Find sport outreach organization : Find a sport outreach organization that targets and serves adults and describe its stated mission or purpose and provide examples of the type of programming
Develop an evaluation plan utilizing the theories : Develop an evaluation plan utilizing the theories including identification of an appropriate external market and benchmarks for salary comparison data
What interest rate would the investment have : Stanley Roper has $2,400 that he is looking to invest. What interest rate would investment have to yield in order for Stanley brother to deliver on his promise
Impact of data resources on the human resource professional : What do you find beneficial in using data to direct human resource decisions? What would you find missing in using data to direct human resource decisions?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd