What does Best Buy’s Form 10-K disclose about its receivables? Original blog posting (October 4, 2016)

Best Buy Co., Inc. Consumer electronics company Fiscal year end of Saturday nearest the end of January Publicly-held, files a Form 10- K with the SEC Best Buy’s condensed and adapted balance sheets follow on the next slide

Best Buy Co., Inc. The notes to the financial statements contain additional information about the company. To follow is an excerpt from Best Buy’s 2016 Form 10-K related to its receivables. Summary of Significant Accounting Policies (page 61 of Best Buy’s 2016 Form 10-K): Receivables Receivables consist principally of amounts due from mobile phone network operators for commissions earned; banks for customer credit card and debit card transactions; and vendors for various vendor funding programs. We establish allowances for uncollectible receivables based on historical collection trends and write-off history. Our allowances for uncollectible receivables were $49 million and $59 million at January 30, 2016, and January 31, 2015, respectively.

Question 1 Why do you think that Best Buy would select the fiscal year ending that it did?

Question 2 What types of Best Buy transactions result in receivables on Best Buy’s balance sheet? How do you know?

Question 3 Calculate the gross amount of Best Buy’s receivables balance for each of the two fiscal years presented in the balance sheet. How did you calculate these amounts?

Question Recap 1. Why do you think that Best Buy would select the fiscal year ending that it did? 2. What types of Best Buy transactions result in receivables on Best Buy’s balance sheet? How do you know? 3. Calculate the gross amount of Best Buy’s receivables balance for each of the two fiscal years presented in the balance sheet. How did you calculate these amounts?

For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at http://accountingintheheadlines.com/ Questions or comments? Contact Dr. Wendy Tietz at wtietz@kent.edu