I need this relatively quick and I hope this makes sense. This essay is more for

Question

I need this relatively quick and I hope this makes sense. This essay is more for me to get my thoughts on paper what financials and how to understand them. 2. Auditors report (who audited and what was their opinionn 3. 4 Financial Statements a. What is the statement b. What do you see in the company interesting, trend, significant. 4. Accounting Method of accounting for Inventory, Fixed Assets, Accounts Receivable a. 5. Notes a. What is significant in the notes( 102 b. Forward looking statements o 6. Conclusion a. How well do you feel company is doing and why 5

Explanation / Answer

4. Accounting

a) Method of accounting for Inventory, Fixed Assets and Accounts Receivable

The company Nike can use any method of accounting for Inventory, Fixed Assets, and Accounts Receivable which is best suitable to company. However the method it follows it used it should be consistent. In general, accounting policies are not changed, since doing so alters the comparability of accounting transactions over time. Only change a policy when the update is required by the applicable accounting framework, or when the change will result in more reliable and relevant information.

Methods of Accounting for Inventory

Inventory includes the raw materials, work-in-process, and finished goods that a company has on hand for its own production processes or for sale to customers. Inventory is considered an asset, so the accountant must consistently use a valid method for assigning costs to inventory in order to record it as an asset. There are following methods for accounting of Inventory

Methods of Accounting for Fixed Assets

A fixed asset is a type of property belonging to a business that is used for production of goods and services. Fixed assets are classified as either intangible or tangible. Intangible fixed assets are non-physical properties such as a patent, copyright, and goodwill. Tangible assets include plant, equipment, land, and buildings. Accounting for fixed assets involves costs, useful life, residual value, depreciation, and amortization.

Determine the cost of acquisition. This refers to the amount of money spent to purchase a fixed asset. It also includes any amounts that can be attributed directly to fixed assets such as the following:

Determine the useful life of fixed asset. Useful life refers to the time period that an asset will be useful to the business (economic life), not how long it will actually last (physical life). Useful life refers to the period in which the asset is expected to be used that may include maintenance or repairs. It is usually less than the physical life. It can also be called economic life, average life, or effective life.

Estimate the residual value of the fixed asset. Residual value or Salvage value is the worth or recoverable value of fixed asset at the end of its useful life. When estimated value is not of a significant amount, its value is assumed to be zero (0).

Residual value is important in accounting because the book value of a fixed asset can never be depreciated to a value below residual value.

Choose a depreciation method. There are following methods for calculating depreciation

Methods of Accounting for accounts Receivables

When you sell goods or services to a customer and allow it to pay you at a later date, this is known as selling on credit, and creates a liabilityfor the customer to pay your business. Conversely, this creates an asset for your company, which is called accounts receivable. This is considered a short-term asset, since you are normally paid in less than one year.

There are following methods for accounting of Accounts Receivables

5. Notes

a) What is significant in Notes

Notes on financial statements serve as a way for a company to provide additional explanation of various portions of the statement. Notes may provide additional information used to clarify a point. This can include further details about items used as reference, a clarification of any applicable policies, a variety of required disclosures, or adjustments made to certain values. While much of the information may be considered required in nature, providing all of the information within the body of the statement may overwhelm the document, making it more difficult to read and interpret by those who receive them.

b) Forward Looking Statements

A forward looking statement describes future events or results. When made by a company, these statements can trigger shareholder lawsuits, so safe harbor provisions are now used to mitigate a company's risk.

A forward-looking statement is defined as:

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