Read the following and answer the questions illustrated below:
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K
- ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
Question 1: What items on the balance sheet would be recognized at historical cost?
Question 2: Which of the items listed using historical cost could potentially be the most undervalued? Would any of the items possibly be overvalued under historical cost?
Question 3: Do the notes to the financial statements disclose fair market values on these items identified? Why? Justify your answer.
Question 4: What is the amount of total assets on the balance sheet? Did this balance seem high, low, or just about right to you? Why?
Question 5: What is the amount of total current liabilities on the balance sheet? What determines if an item is listed as current?
Question 6: Do you feel that the notes to the financial statements are adequate in regard to disclosing areas that need further clarification? Why?
Question 7: Does Nike, Inc. address inventory reserves? If so what is their policy related to this? Do you agree with this? Why?
Question 8: Does Nike, Inc. use the retail inventory method and if so, what version do they use? If not why?
Question 9: What is included in property, plant, and equipment? Are there any special rules related to valuation of this group of assets?
Question 10: Which asset under property, plant, and equipment makes up the largest portion of the balance? Which asset makes up the smallest portion of the balance?
Question 11: Do you think that there should be more detail on the face of the balance sheet on the property, plant, and equipment account such as showing the different asset accounts? What would be the value of doing this?
Question 12: Are there any gains or losses included in the income statement balance? If so what are the details? If not why do you think they are not included?