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Problem VII: A: Etisalat signed a 3-year deal to sell excess capacity on its cable network to DU company for $18 million. The deal was
Problem VII: A: Etisalat signed a 3-year deal to sell excess capacity on its cable network to DU company for $18 million. The deal was completed at the beginning of Dec. 1, 2009. Etisalat received the full amount from DU on that day. Etisalat decided to recognize "Revenue" of $18 million for the financial year just ended on Dec. 31. 2009. Do you agree with Etisalat? Explain. If you don't agree, explain how Etisalat should recognize this contract. B: Best Home Appliances Inc. (BHAI) usually sells its home appliances with a warranty for one year. Last year (2016) BHAI additional year for an extra price By the end of 2016 BHAI's sales were as follows: started a new policy and offered its customers the option of buying an extended warranty for one Home appliances for $412 Million Extended warranties for $3 million. - End of 2016 BHIA reported revenues of $415 million. Do you agree with that? Explain
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