16.

In January 2024, Summit Department Store sells a gift card for $85 and receives cash. In February 2024, the customer comes back and spends $55 of the gift card to purchase a water bottle. What is the financial statement effect of the sale of the gift card in January?

Multiple Choice

• Increase assets by $55, increase liabilities by $85, and decrease stockholders equity by $30

• Increase assets by $55, decrease liabilities by $30, and increase stockholders equity by $85

• Increase assets by $85 and increase stockholders equity by $85

• Increase assets by $85 and increase liabilities by $85