Apia Chapter For Statements 2. Balance sheet 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 fiancial statements to make several interpretations regarding the company's financial condition and performance Green Caterpillar Garden Supples Inc. sa 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 Green Caterpillar Garden Supplies Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Year 1 Assets Current assets $1,845 $0 50 Cash and equivalents Accounts receivable Inventories 844 675 117 0 2.475 1,980 664 625 Total current assets $5,625 $4,500 $625 Net fixed assets: Net plant and equipment 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 2,344 $3,125 1,875 $2,500 $5,500 6,094 4,875 2,625 $7,500 $10,000 $9,375 $12.500 Total assets $12,500 $10,000 Total assets $12,500 $10,000 Total abilities and equity $12,500 $10,000 Given the information in the preceding balance sheet-and assuming that Green Caterpillar Garden Supplies Inc. has 50 million shares of common stock outstanding-read each of the following statements, then identify the selection that best interprets the information conveyed by the balance sheet. Statement #1: Green Caterpillar's accumulated owed financial obligations decreased from Year 1 to Year 2 This statement is because Long-term debt decreased from $664 million at the end of Year 1 to $625 million by the end of Year 2. The accounts payable account remained 50 for both Years 1 and 2 Accruals actually increased from 50 in Year 1 to $117 million at the end of Year 2 Statement #2: On December 31 of Year 2, Green Caterpillar Garden Supplies Inc. had $2,306 million of actual money that it could have spent immediately This statement is because The funds recorded in Green Caterpillar's accounts receivable account represents funds that are other cash or can be converted into cash almost immediately The funds recorded in Green Caterpillar's cash and equivalents account represents funds that are either orth or can be converted into cash almost immediately Green Caterpillar's Year 2 cash and equivalents balance is $5,805 million Statement #3 The book value per share of Green Caterpillar's stock in Year 2 was $187.50. Aplia Chapter 2 - Financial Statements, Cash Flow, and Taxes The funds recorded in Green Caterpillar's accounts receivable account represents funds that are either cash or can be converted into cash almost immediately The tonds recorded in Green Caterpillar's cash and equivalents acobunt represents funds that are either cash or can be converted into cash almost immediately Green Caterpillar's Year 2 cash and equivalents balance is $5,805 milion. Statement #3: The book value per share of Green Caterpillar's stock in Year 2 was $187.50 This statement is because The per share book value is calculated by dividing the company totalment by the number of outstanding shares of common stock The pet store book value is calculated by dividing the company's total debt by the number of outstanding shares of common stock The per shore book value is calculated by dividing the company's total common equiry by the nutriber of outstanding shores of common stock Based on your understanding of the different reported on the bloosheet and the information they provide which statement regarding Green Caterpillar Garden Supplies Inc. balance sheets consistent with U.S. Chunray Accepted Accounting Proples (GAP)? The company's debts should be listed in order of the liquidity The company's debts are listed in the order in which they are to be paid The company's delits should be listed from those carrying the largest balance to those with the smallest balance