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 financial statements to make several interpretations regarding the company's financial condition and performance. Cold Goose Metal Works 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. Year 1 Cold Goose Metal Works Inc.Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Assets Liabilities and equity Current assets: Current liabilities: Cash and equivalents $5,766 $4,612 Accounts payable $0 Accounts receivable 2,109 1,688 Accruals 293 Inventories 6,187 4,950 Notes payable 1,660 Total current assets $14,062 $11,250 Total current liabilities Net fixed assets: Long-term debt 5,859 Net plant and equipment $13,750 Total debt $7,812 Common equity: Common stock 15,235 Retained earnings Total common equity $23,438 Total assets $31,250 $25,000 Total liabilities and equity $31,250 1,562 $1,562 4,688 $6,250 12,188 6,562 $18,750 $25,000 Given the information in the preceding balance sheet-and assuming that Cold Goose Metal Works 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:Cold Goose's net collection of inventory items increased by more than the firm sold between Years 1 and 2. This statement is , because: The accruals balance decreased by $293 million between Years 1 and 2 Total inventories of raw materials, work-in-process, and final goods decreased by $1,237 million between Year 1 and Year 2 O Total inventories of raw materials, work-in-process, and final goods increased from $4,950 million to $6,187 million between Year 1 and Year 2 Statement #2: In Year 2, Cold Goose Metal Works Inc. was profitable. This statement is , because: Cold Goose's total assets increased between Years 1 and 2 O Cold Goose's retained earnings account increased between the end of Years 1 and 2 The cash and equivalents account increased between Years 1 and 2 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 financial statements to make several interpretations regarding the company's financial condition and performance. Cold Goose Metal Works 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. Year 1 Cold Goose Metal Works Inc.Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Assets Liabilities and equity Current assets: Current liabilities: Cash and equivalents $5,766 $4,612 Accounts payable $0 Accounts receivable 2,109 1,688 Accruals 293 Inventories 6,187 4,950 Notes payable 1,660 Total current assets $14,062 $11,250 Total current liabilities Net fixed assets: Long-term debt 5,859 Net plant and equipment $13,750 Total debt $7,812 Common equity: Common stock 15,235 Retained earnings Total common equity $23,438 Total assets $31,250 $25,000 Total liabilities and equity $31,250 1,562 $1,562 4,688 $6,250 12,188 6,562 $18,750 $25,000 Given the information in the preceding balance sheet-and assuming that Cold Goose Metal Works 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:Cold Goose's net collection of inventory items increased by more than the firm sold between Years 1 and 2. This statement is , because: The accruals balance decreased by $293 million between Years 1 and 2 Total inventories of raw materials, work-in-process, and final goods decreased by $1,237 million between Year 1 and Year 2 O Total inventories of raw materials, work-in-process, and final goods increased from $4,950 million to $6,187 million between Year 1 and Year 2 Statement #2: In Year 2, Cold Goose Metal Works Inc. was profitable. This statement is , because: Cold Goose's total assets increased between Years 1 and 2 O Cold Goose's retained earnings account increased between the end of Years 1 and 2 The cash and equivalents account increased between Years 1 and 2