5. Briefly explain Apples revenue recognition policies for iPhone and Apple TV.

6. Assume that instead of using its then existing revenue recognition policies for iPhone and Apple TV, Apple instead recognized all revenues and associated costs at the time of sale. Estimate the Net Income that Apple would have reported for the fiscal year ended September 26, 2009. (hint: assume that all deferred revenue and deferred costs are associated with iPhone and Apple TV sales)

7. Which of the above two methods of accounting for Apple TV and iPhone sales do you think better reflects the underlying economics of the business? Briefly explain your answer.