E1-15 Classify items as assets, liabilities, and stockholders' equity, and prepare accounting equation

Suppose the following items were taken from the balance sheet of Nike, Inc. (All items are in millions.)

1. Cash $2,291.1 7. Inventory

2. Accounts receivable 2,883.9 8. Income taxes payable
3. Common stock 2,874.2 9. Equipment
4. Notes payable 342.9 10. Retained earnings
5. Buildings 3,759.9 11. Accounts payable
6. Mortgage payable 1,311.5

Instructions
(a) Classify each of these items as an asset, liability, or stockholders' equity and determine the total
dollar amount for each classification.
(b) Determine Nike's accounting equation by calculating the value of total assets, total liabilities, and
total stockholders' equity.
(c ) To what extent does Nike rely on debt versus equity financing?
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a

(a) Assets (in millions)

Cash Value
Accounts receivable Value
Inventory Value
Equipment Value
Buildings Value
Total Assets ?

Liabilities
Notes payable Value
Accounts payable Value
Mortgage payable Value
Income taxes payable Value
Total liabilities ?

Stockholders' equity
Common stock Value
Retained earnings Value
Total stockholders' equity ?

(b) Assets = Liabilities + Stockholders' Equity

Value Value Value
(c) Total liabilities Value
Total assets Value
Assets financed by debt ?

Total equity Value

Total assets Value
Assets financed by equity ?

After you have completed E1-15, consider the additional question.

1. Assume that building increased to $4,600 and common stock increased to $3,714.3
What impact do these changes have to the percentage of assets financed by debt
and equity?
 repare accounting equation
c. (All items are in millions.)

$2,357.0
86.3
1,957.7
5,818.9
2,815.8

quity and determine the total

al assets, total liabilities, and

mber or a formula in cells with a "?" .

sed to $3,714.3
anced by debt