DeAndre is CEO of GameGo, an online video-game clearinghouse. GameGo receives used videogames from members of the GameGo Gamer community, lists the video games on the GameGoerse website, and sells the used video games to GameGo Gamers at a 20% markup. All sales are for cash. During March, GameGo sold $1,200,000 of video games, with $1,000,000 going to the videogames’ original owners and $200,000 going to GameGo. Required: (A) Assume GameGo is viewed as a principal. Write any journal entries necessary to record revenue and cost of goods sold, and indicate GameGo’s gross profit for March. (B) Assume GameGo is viewed as an agent. Write any journal entries necessary to record revenue and cost of goods sold, and indicate GameGo’s gross profit for March.
DeAndre is CEO of GameGo, an online video-game clearinghouse. GameGo receives used videogames from members of the GameGo Gamer community, lists the video games on the GameGoerse website, and sells the used video games to GameGo Gamers at a 20% markup. All sales are for cash. During March, GameGo sold $1,200,000 of video games, with $1,000,000 going to the videogames’ original owners and $200,000 going to GameGo. Required: (A) Assume GameGo is viewed as a principal. Write any journal entries necessary to record revenue and cost of goods sold, and indicate GameGo’s gross profit for March. (B) Assume GameGo is viewed as an agent. Write any journal entries necessary to record revenue and cost of goods sold, and indicate GameGo’s gross profit for March.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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DeAndre is CEO of GameGo, an online video-game clearinghouse. GameGo receives used videogames from members of the GameGo Gamer community, lists the video games on the GameGoerse website, and sells the used video games to GameGo Gamers at a 20% markup. All sales are for cash. During March, GameGo sold $1,200,000 of video games, with $1,000,000 going to the videogames’ original owners and $200,000 going to GameGo.
Required:
(A) Assume GameGo is viewed as a principal. Write any journal entries necessary to record revenue and cost of goods sold, and indicate GameGo’s gross profit for March.
(B) Assume GameGo is viewed as an agent. Write any journal entries necessary to record revenue and cost of goods sold, and indicate GameGo’s gross profit for March.
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