$1.$ 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.

Blue Hamster Manufacturing 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.

Blue Hamster Manufacturing Inc.

Balance Sheet for Year Ending December $31$

$($Millions of Dollars$)$

Year $2$ Year $1$ Year $2$ Year $1$

Assets Liabilities and equity

Current assets: Current liabilities:

Cash and equivalents $$6,457$ Accounts payable $$0$ $$0$

Accounts receivable $2,9532,363$ Accruals $4100$

Inventories $8,6626,930$ Notes payable $2,3242,187$

Total current assets $$19,687$ $$15,750$ Total current liabilities $$2,187$

Net fixed assets: Long$-$term debt $8,2036,563$

Net plant and equipment $$19,250$ Total debt $$10,937$ $$8,750$

Common equity:

Common stock $21,32817,063$

Retained earnings $9,187$

Total common equity $$32,813$ $$26,250$

Total assets $$43,750$ $$35,000$ Total liabilities and equity $$43,750$ $$35,000$

Given the information in the preceding balance sheet$$and assuming that Blue Hamster Manufacturing Inc. has $50$ million shares of common stock outstanding$$read each of the following statements, then identify the selection that best interprets the information conveyed by the balance sheet.

Statement #$1$: Blue Hamster$$s accumulated owed financial obligations decreased from Year $1$ to Year $2.$