This case relates to one of the most important topics in the field of financial accounting and reporting: the recognition of revenue. It is designed for use in the necessary course of MBA financial accounting or MBA elective course in financial reporting and analysis. The company, best buy, Inc, an electronics retail televisions and other electronic products. The company is a little bit unique, however, in that it not only sells the major TV brands, but it also sells TVs under its own brand, which carry a one year warranty for which the retailer and not the manufacturer, is responsible. The company also offers two additional years of warranty on their TV, which is also the sole responsibility of the seller. The case asks students to solve a number of situations of recognition of income and related expenditure. These situations include product sales, where the sale price also includes guarantees, "bundle" of sales and extended warranty sales, and a bundle of sales and extended warranty sales, where the company has an agreement to outsource maintenance extended warranty "Hide
by Brandt R Allen, E. Richard Brownlee II Source: Darden School of Business 3 pages. Publication Date: October 26, 2011. Prod. #: UV5247-PDF-ENG
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