Assume the following are the financial statements of Nike, Inc.

Consolidated Statements of Income
	Year ended May 31
In Millions	2011	2010
Revenues	$ 21,862	$ 19,014
Cost of sales	11,354	10,214
Gross profit	10,508	8,800
Demand creation expense	2,948	2,356
Operating overhead expense	4,845	3,970
Total selling and administrative expense	7,793	6,326
Interest expense (income), net	4	6
Other (income)	(33)	(49)
Income before income taxes	2,744	2,517
Income taxes	611	610
Net income	$ 2,133	$ 1,907

Balance Sheets
	May 31
In Millions	2011	2010
Assets
Cash and equivalents	$ 1,955	$ 3,079
Short-term investments	2,583	2,067
Accounts receivable, net	3,138	2,650
Inventories	2,715	2,041
Deferred income taxes	312	249
Prepaid expenses and other current assets	594	873
Total current assets	11,297	10,959
Property, plant and equipment, net	2,115	1,932
Identifiable intangible assets (net)	487	467
Goodwill	205	188
Deferred income taxes and other assets	894	873
Total assets	$ 14,998	$ 14,419
Liabilities and Shareholders' Equity
Current portion of long-term debt	$ 200	$ 7
Notes payable	187	139
Accounts payable	1,469	1,255
Accrued liabilities	1,985	1,904

Balance Sheets
	May 31
In Millions	2011	2010

Income taxes payable	117	59
Total current liabilities	3,958	3,364
Long-term debt	276	446
Deferred income taxes and other liabilities	921	855
Total liabilities	5,155	4,665
Common stock at stated value	3	3
Capital in excess of stated value	3,944	3,441
Accumulated other comprehensive income	95	215
Retained earnings	5,801	6,095
Total shareholders' equity	9,843	9,754
Total liabilities and shareholders' equity	$ 14,998	$ 14,419

We forecast Nike's income statement using the following forecast assumptions:

Revenue growth based on growth in revenues from 2010 to 2011	15%
Cost of sales/Revenues	51.9%
Demand creation expense/Revenues	13.5%
Operating overhead expenses/Revenues	22.2%
Income taxes/Income before income taxes	22.3%

Consolidated Statements of Income
($ millions)	2011	2012
Revenues	$21,862	$Answer
Cost of sales	11,354	Answer
Gross profit	10,508	Answer
Demand creation expense	2,948	Answer
Operating overhead expense	4,845	Answer
Interest expense, net	4	Answer
Other income	33	Answer

Consolidated Statements of Income
($ millions)	2011	2012

Income before income taxes	2,744	Answer
Income taxes	611	Answer
Net Income	$ 2,133	$Answer

Instructions:

Forecast Nike's fiscal year 2012 balance sheet.

Assume no change for: short-term investments, goodwill, notes payable, common stock, capital in excess of stated value and accumulated other comprehensive income.

Round forecasts to $ millions.

We forecast Nike's balance sheet using the following forecast assumptions:

Accounts receivable/Revenues	14.4%
Inventories/Revenues	12.4%
Deferred income taxes/Revenues	1.4%
Prepaid expenses and other current assets/Revenues	2.7%
L-T deferred income taxes and other assets/Revenues	4.1%
Depreciation expense/Prior-year PPE, net (incl. in overhead)	17.3%
Amortization expense	$24
Accounts payable/Revenues	6.7%
Accrued liabilities/Revenues	9.1%
Income taxes payable/Revenues	0.5%
Deferred income taxes and other liabilities/Revenues	4.2%
Capital expenditures/Revenues	2.0%
Dividends/Net income	26.0%
Current portion of L/T debt due in 2013	$48

Balance Sheet
($ millions)	2011	2012
Assets
Cash and equivalents	$ 1,955	$Answer
Short-term investments	2,583	Answer
Accounts receivable, net	3,138	Answer
Inventories	2,715	Answer
Deferred income taxes	312	Answer
Prepaid expenses and other current assets	594	Answer
Total current assets	11,297	Answer

Balance Sheet
($ millions)	2011	2012

Property, plant and equipment, net	2,115	Answer
Identifiable intangible assets, net	487	Answer
Goodwill	205	Answer
Deferred income taxes and other assets	894	Answer
Total assets	$14,998	$Answer
Liabilities and Shareholders' Equity
Current portion of long-term debt	$ 200	$ Answer
Notes payable	187	Answer
Accounts payable	1,469	Answer
Accrued liabilities	1,985	Answer
Income taxes payable	117	Answer
Total current liabilities	3,958	Answer
Long-term debt	276	Answer
Deferred income taxes and other liabilities	921	Answer
Total liabilities	5,155	Answer
		Answer rating: 100% (QA) Consolidated Statements of Income millions 2011 2012 2012 Calculations Revenues 21862 25141 21862 115 Cost of sales 11354 13048 25141 519 Gross profit ... View the full answer Related Book For   Intermediate Accounting ISBN: 978-0324300987 10th Edition Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones See More Books Posted Date: Aug 30, 2018 07:47 AM See More Questions Students also viewed these accounting questions The following are the financial statements of the parent company Alpha plc, a subsidiary company Beta and an associate company Gamma. On 1 January 20X5 Alpha plc acquired 80% of Beta plc for... The following are comparative financial statements of the Perez Company for 2006, 2007, and 2008: Required On the basis of the given information: 1. Prepare horizontal analyses for Perez Company... The following are the financial statements of Nosker Company. Additional data: 1. Dividends declared and paid were $20,000. 2. 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