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Complete Case details are given below :
Case Name : Circuit City Stores, Inc. (A)
Authors : William J. Bruns Jr., Susan S. Harmeling
Discipline : Accounting
Case Length : 11 pages
Solution sample availability : YES
Plagiarism : NO (100% Original work)
Description for case is given below :
Circuit City sells consumer electronic equipment, appliances, and extended service and warranty contracts which supplement those provided by equipment manufacturers. Equipment is sold at low margins, while warranties carry very high margins. A question has been raised about the proper method for recognizing revenues on the warranty portion of the combined sale. Deferring revenue will cut profit reported at the time of sales but may better match costs of warranty service.
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