statement 1 is : t/f statement 2 is: t/f statement 3 is: correct/ incorrect The balance sheet

 

statement 1 is : t/f

statement 2 is: t/f

statement 3 is: correct/ incorrect
 
 
 

Transcribed Image Text:

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. Green Caterpillar Garden Supplies Inc. 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. Green Caterpillar Garden Supplies Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 1 Year 2 Year 2 Year 1 Assets Current assets: Cash and equivalents Accounts receivable Inventories Total current assets Net fixed assets: Net plant and equipment Total assets 2,953 8,662 $19,687 $43,750 $6,457 2,363 6,930 $15,750 Liabilities and equity Current liabilities: Accounts payable Accruals Notes payable Total current liabilities Long-term debt $19,250 Total debt Common equity: Common stock Retained earnings Total common equity $35,000 Total liabilities and equity $0 410 2,324 8,203 $10,937 21,328 $32,813 $43,750 $0 0 2,187 $2,187 6,563 $8,750 17,063 9,187 $26,250 $35,000 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. 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. Green Caterpillar Garden Supplies Inc. 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. Green Caterpillar Garden Supplies Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 1 Year 2 Year 2 Year 1 Assets Current assets: Cash and equivalents Accounts receivable Inventories Total current assets Net fixed assets: Net plant and equipment Total assets 2,953 8,662 $19,687 $43,750 $6,457 2,363 6,930 $15,750 Liabilities and equity Current liabilities: Accounts payable Accruals Notes payable Total current liabilities Long-term debt $19,250 Total debt Common equity: Common stock Retained earnings Total common equity $35,000 Total liabilities and equity $0 410 2,324 8,203 $10,937 21,328 $32,813 $43,750 $0 0 2,187 $2,187 6,563 $8,750 17,063 9,187 $26,250 $35,000 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.

Answer rating: 100% (QA)

Statement 1 The given statement is false because the balance of current assets has actually increase... View the full answer