Question $1(4$ points$)$

Prior to starting this question, please read the Word document "Best Buy in the News". Then consider how these news articles effect financial reporting.

Best Buy

Best Buy incurs expenses as it closes $15$ stores. Assume the expenses are material to an investor's assessment of future earning potential.

Best Buy uses cash to purchase hardware and software to expand its online selling capabilities. Best Buy sells customers laptops and smartphones purchased from businesses in China that now include a additional $10\backslash \%$ tariff cost that was paid by Best Buy. Best Buy expends cash for rebranding with its "spokeshologram".

$1.$ Capitalized as an asset at historical cost, with an indefinite useful life.

$2.$ Expensed as Cost of Sales.

$3.$ Expensed as Operating Expenses.

$4.$ Expensed as Other Losses, NET of tax.

$5.$ Expensed as Other Expenses or Losses.

$6.$ Capitalized as an asset at historical cost, with a useful life.