Blue Hamster Manufacturing Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Blue Hamster Manufacturing Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Assets Current assets: Cash and equivalents Accounts receivable Inventories Total current assets Net fixed assets: Net plant and equipment Total assets 1,688 4,950 $11,250 $25,000 $3,690 1,350 3,960 $9,000 $11,000 $20,000 Liabilities and equity Current liabilities: Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total debt Common equity: Common stock Retained earnings Total common equity Total liabilities and equity 50 234 1,328 4,688 $6,250 12,188 $18,750 $25,000 Year 1 50 0 1.250 $1,250 3,750 $5,000 9,750 5,250 $15,000 $20,000 Given the information in the preceding balance sheet-and assuming that Blue Hamster Manufacturing Inc. has 50 million shares c outstanding-read each of the following statements, then identify the selection that best interprets the information conveyed by the Statement #1: Blue Hamster's net collection of inventory items increased by more than the firm's sales between Years 1 and This statement is TED d because: The accruals balance decreased by $234 million between Years 1 and 2 Total inventories of raw materials, work-in-process, and final goods increased from $3,960 million to $4,950 million between Year 1 and Year 2 Total inventories of raw materials, work-in-process, and final goods decreased by $990 million between Year 1 and Year 2 Statement #2: Over the past two years, Blue Hamster Manufacturing Inc. has relied more on the use of short-term debt than on long- term debt financing. This statement is , because: Blue Hamster's total notes payable increased by $78 million, while its common stock account increased by $2,438 million Blue Hamster's total current liabilities decreased by $312 million, while its long-term debt account decreased by $938 milion Blue Hamster's total current liabilities increased by $312 million, while its use of long-term debt increased by $938 million Statement #3: The book value per share of Blue Hamster's stock in Year 2 was $375.00. LIMITED s and Statement #3: The book value per share of Blue Hamster's stock in Year 2 was $375.00. This statement is , because: The per-share book value is calculated by dividing the company's total debt by the number of outstanding shares of common stock The per-share book value is calculated by dividing the company's total assets by the number of outstanding shares of common stock The per-share book value is calculated by dividing the company's total common equity by the number of outstanding shares of common stock Based on your understanding of the different items reported in the balance sheet and the information they provide, which statement regarding e Hamster Manufacturing Inc.'s balance sheet is consistent with U.S. Generally Accepted Accounting Principles (GAAP)? The company's assets should be listed from those carrying the largest balance to those with the smallest balance. The company's assets should be listed in alphabetical order The company's assets should be listed in the order in which they are to be converted into cash. Grade it Now Save & Continue Continue without saving Blue Hamster Manufacturing Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Assets Current assets: Cash and equivalents Accounts receivable Inventories Total current assets Net fixed assets: Net plant and equipment Total assets 1,688 4,950 $11,250 $25,000 $3,690 1,350 3,960 $9,000 $11,000 $20,000 Liabilities and equity Current liabilities: Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total debt Common equity: Common stock Retained earnings Total common equity Total liabilities and equity 50 234 1,328 4,688 $6,250 12,188 $18,750 $25,000 Year 1 50 0 1.250 $1,250 3,750 $5,000 9,750 5,250 $15,000 $20,000 Given the information in the preceding balance sheet-and assuming that Blue Hamster Manufacturing Inc. has 50 million shares c outstanding-read each of the following statements, then identify the selection that best interprets the information conveyed by the Statement #1: Blue Hamster's net collection of inventory items increased by more than the firm's sales between Years 1 and This statement is TED d because: The accruals balance decreased by $234 million between Years 1 and 2 Total inventories of raw materials, work-in-process, and final goods increased from $3,960 million to $4,950 million between Year 1 and Year 2 Total inventories of raw materials, work-in-process, and final goods decreased by $990 million between Year 1 and Year 2 Statement #2: Over the past two years, Blue Hamster Manufacturing Inc. has relied more on the use of short-term debt than on long- term debt financing. This statement is , because: Blue Hamster's total notes payable increased by $78 million, while its common stock account increased by $2,438 million Blue Hamster's total current liabilities decreased by $312 million, while its long-term debt account decreased by $938 milion Blue Hamster's total current liabilities increased by $312 million, while its use of long-term debt increased by $938 million Statement #3: The book value per share of Blue Hamster's stock in Year 2 was $375.00. LIMITED s and Statement #3: The book value per share of Blue Hamster's stock in Year 2 was $375.00. This statement is , because: The per-share book value is calculated by dividing the company's total debt by the number of outstanding shares of common stock The per-share book value is calculated by dividing the company's total assets by the number of outstanding shares of common stock The per-share book value is calculated by dividing the company's total common equity by the number of outstanding shares of common stock Based on your understanding of the different items reported in the balance sheet and the information they provide, which statement regarding e Hamster Manufacturing Inc.'s balance sheet is consistent with U.S. Generally Accepted Accounting Principles (GAAP)? The company's assets should be listed from those carrying the largest balance to those with the smallest balance. The company's assets should be listed in alphabetical order The company's assets should be listed in the order in which they are to be converted into cash. Grade it Now Save & Continue Continue without saving
Expert Answer:
Answer rating: 100% (QA)
Cash cash equivalents Total current assets account receivables in... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-1337395250
15th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
Students also viewed these finance questions
-
Given the information in the following table, what exchange rates would be used if you converted $1 million into euros, and then converted the euros into yuan, yuan into yen, and finally the yen into...
-
Given the information in the following lag exercises, compute the early, late, and slack times for the project network. Which activities on the critical path have only the start or finish of the...
-
Given the information in the table below, develop a BCG Matrix and an IEMatrix. DIVISIOns Profits Sales Relative Market Share Industry Growth Rate IFE Total Weighted Scores EFE Total Weighted Scores...
-
The solution of the differential equation x y = (c +cx) log x+2logx+3 y = ( +cx) log x+log x+2 Oy=(+cx)logx+logx+2 y=(q + c log x)x+logx+2 dy -x+y = log x is dx dx
-
Refer to KTMs financial statements in Appendix A. Compute its cost of goods available for sale for the year ended December 31, 2011.
-
Propose structures for compounds G-I: concd HNO heat 60-65 OH
-
Journalize the following adjusting entries at December 31: 1. Services provided but not recorded, $1,500. 2. Salaries earned by employees but not recorded, $2,300. 3. Accrued interest on a note...
-
Yarnell Electronics sells computer systems to small businesses. Yarnell engaged in the following activities involving notes receivable: a. On November 1, 2011, Yarnell sold a $5,000 system to Ross...
-
Sara's Sauces The most popular product of Sara's Sauces is its salad dressing. The recipe calls for at least 20% lemon juice and at least 30% balsamic vinegar, and at least 30% but not more than 45%...
-
Create a three to five minute persuasive decision briefing based on the following situation and scenario. Situation : You have asked your boss for some time with one of the senior executives...
-
Discuss how an organization's diversity strategy can support the business strategy. Provide at least three specific examples and explain why and how they support organizational success. Why is...
-
Rearrange your code from 4.28.1 to achieve better performance on a 2-issue statically scheduled processor from Figure 4.69. Exercise 4.28.1 Translate this C code into MIPS instructions. Your...
-
Repeat 4.28.5, but this time assume that in the 2-issue processor one of the instructions to be executed in a cycle can be of any kind, and the other must be a non-memory instruction. Exercise 4.28.5...
-
The following is a set of VLE data for the system acetone(1)/methanol(2) at 55C: (a) Basing calculations on Eq. (13.24), find parameter values for the Margules equation that provide the best fit of G...
-
We can convert all load/store instructions into register-based (no offset) and put the memory access in parallel with the ALU. What is the clock cycle time if this is done in the single-cycle and in...
-
In a binary tree, print the nodes in zigzag order. In the first level, nodes are printed in the left to right order. In the second level, nodes are printed in right to left and in the third level...
-
In this part, you will upload and analyze Apache web server logs that represent "regular" activity for VSI into your Splunk environment. To do so, complete the following steps: 1. Return to the "Add...
-
Presented below are income statements prepared on a LIFO and FIFO basis for Kenseth Company, which started operations on January 1, 2024. The company presently uses the LIFO method of pricing its...
-
The Davidson Corporations balance sheet and income statement are provided here. a. Construct the statement of stockholders equity for December 31, 2018. No common stock was issued during 2018. b. How...
-
a. Rework problem 18-4 using the spreadsheet model. b. Construct data tables for the intrinsic value and BlackScholes exercise value for this option and graph the relationship. Include possible stock...
-
Rubash Company recently issued two types of bonds. The first issue consisted of 20-year straight (no warrants attached) bonds with a 9% annual coupon. The second issue consisted of 20-year bonds with...
-
What is reaction coordinate? What is its significance in chemical reaction?
-
Show that for steady state flow process, \(\Delta H=Q-W_{S}\).
-
An ideal gas \(\left(C_{P}=5, C_{V}=3 ight)\) is changed from \(1 \mathrm{~atm}\) and \(22.4 \mathrm{~m}^{3}\) to \(10 \mathrm{~atm}\) and 2.24 \(\mathrm{m}^{3}\) by the reversible process of heating...
Study smarter with the SolutionInn App