Question: Nike Inc had the following condensed balance sheet on

Nike, Inc. , had the following condensed balance sheet on May 31, 2011 ($ in millions):

Suppose the following transactions occurred during the first 3 days of June ($ in millions):
1. Nike acquired inventories for cash, $28.
2. Nike acquired inventories on open account, $19.
3. Nike returned for full credit, $4, some unsatisfactory shoes that it acquired on open account in May.
4. Nike acquired $14 of equipment for a cash down payment of $5, plus a 2-year promissory note of $9.
5. To encourage wider displays, Nike sold some special store equipment to New York area stores for $40 cash. The equipment had cost $40 in the preceding month.
6. Clint Eastwood produced, directed, and starred in a movie. As a favor to a Nike executive, he agreed to display Nike shoes in a basketball scene. Nike paid no fee.
7. Nike disbursed cash to reduce accounts payable, $16.
8. Nike borrowed cash from a bank, $50.
9. Nike sold additional common stock for cash to new investors, $90.
10. The president of the company sold 5,000 shares of his personal holdings of Nike stock through his stockbroker.

1. By using a format similar to Exhibit, prepare an analysis showing the effects of the June transactions on the financial position of Nike.

2. Prepare a balance sheet as of June 3.
View Solution:

Sale on SolutionInn
  • CreatedFebruary 20, 2015
  • Files Included
Post your question