Question

2. Balance sheet A Aa The balance sheet provides a snapshot of the financial condition of a company. Investors and analysts use the information given on the balance sheet and other financial statements to make several interpretations regarding the company's financial condition and performance Cute Camel Woodcraft Company is a hypothetical company. Suppose it has the following balance sheet items reported at the end of its first year of operation. For the second year, some parts are still incomplete. Use the information given to complete the balance sheet Cute Camel Woodcraft Company Balance Sheet for Year Ending December 31 (Millions of dollars) Year 2 Year 1 Year 2 Year 1 30 Assets Current assets: Cash and equivalents Accounts receivable Inventories Total current assets $2,306 844 2,475 $5,625 $1,845 675 1,980 $4,500 Liabilities and equity Current liabilities: Accounts payable Accruals Notes payable Total current liabilities 117 664 781 625 $625 Long-term debt Net fixed assets: Net plant and equipment 2,344 1,875 6,875 $3,125 $2,500 Copimon equity: Common stock Retained earnings Total common equity Total liabilities and equity 6,094 3,281 $9,375 $12,500 4,875 2,625 $7,500 $10,000 Total assets $12,500 $10,000

Answer 1

A balance sheet always tallies

Total current liabilities = 0+117+664 = $781

Retained earnings = 9375-6094 = $3281

Net Plant and Equipment = 12500-5625 = $6875

Cash and Equivalents = 2306

Statement 1 is false because

Total inventory increased from 1980 to 2475 million

Statement 2 is false because

Current Liabilities increased by $156 million while long term debt increased by 469 million

Statement 3 is true because

First reason is correct

Listed in the order in which they are converted into cash