Find the Accounts Receivable (may also be called Trade Receivables) for Nike, In

Question

Find the Accounts Receivable (may also be called Trade Receivables) for Nike, Inc. (NKE). How much is the "net amount"? This is the amount after deducting the Allowance for Uncollectible Accounts (this can have some other names).

How much is the "gross amount"? If this information is not shown on the Balance Sheet, you should be able to find it in the notes that follow the financial statements. Do you think the Allowance for Uncollectible Accounts is a reasonable estimate of the uncollectible accounts? Why?

Explanation / Answer

As per the information available from the Balance Sheet of Nike, Inc, the value of company's net account receivables is equal to the value of company's gross account receivables for some of the years. It indicates that the company is not maintaining allowance for uncollectible accounts. The adjustment to gross value of receivables is made on an annual basis with respect to bad debts for the respective year which provides us with the figure for net receivables.

Value of Gross Receivables (2015) = $3.44 Billion

Value of Net Receivables (2015) = $3.36 Billion

The difference in the value of gross and net receivables is on account of bad debts.

Since, the company is not maintaining Allowance for Uncollectible Accounts, it is not possible to determine as to whether the company is maintaining a reasonable estimate of uncollectible accounts.

The data has been taken from the following source:

Source: http://www.marketwatch.com/investing/stock/nke/financials/balance-sheet

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