Question

Short answer response.

Toys "R" Us stores are closing nationwide in the US and the UK after the major industry retailer declared bankruptcy a couple weeks ago.

Please discuss this subject and tie in knowledge pertaining to any of the content covered in class (Intermediate Accounting 2). Please try and keep the answer relative to the field of accounting.

Topics covered in class so far: Earnings per share, Investments, Stockholders equity, Current liabilities and contingencies, Long-term liabilities, Accounting for leases, Dilutive securities, Accounting for income taxes, Accounting for pensions

IMPORTANT - You don't have to provide an answer for each topic, just relate how one or two of these topics significantly relate to the current event.

Answer 1

The toy chain’s U.S. division entered bankruptcy in September, planning to emerge with a leaner business model and more manageable debt. A new $3.1 billion loan was obtained to keep the stores open during the turnaround effort, but results worsened more than expected during the holidays, casting doubt on the chain’s viability

Within six weeks of announcing it was closing more than 380 stores nationwide, Toys ‘R’ Us is making preparations for a complete liquidation of all its U.S. stores after so far failing to find a buyer or reach a debt restructuring deal with lenders following its bankruptcy

This Happens Due To for not able to pay the debts and it had taken a loan for opening of new project that doesnt go will for which the have lost all of there assets and the were deemed for the liquidation of the company the comapny is going to close all of its shop which is not only aproblem to company the amount of unemployment related to liquidations is pretty higher