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.

Cute Camel Woodcraft Company 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 sheets for Cute Camel Woodcraft

Company for the years ending December $31,$ Year $2$ and $1,$ respectively.

Cute Camel Woodcraft Company

Balance Sheet

For the Year ended December $31$

Given the information in the preceding balance sheet$-$and assuming that Cute Camel Woodcraft Company 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 #$1$: Cute Camel$$s pool of relatively liquid assets, which are available to support the company$$s current and future sales, decreased from Year $1$ to Year $2.$

This statement is $,$ because:

Cute Camel$$s total current liabilities balance decreased by $$22,500$ between Year $1$ and Year $2.$

Cute Camel$$s total current asset balance decreased from $$112,500$ to $$90,000$ between Year $1$ and Year $2.$

Cute Camel$$s total current liabilities balance increased from $$13,500$ to $$16,875$ between Year $1$ and Year $2.$

Cute Camel$$s total current asset balance actually increased from $$90,000$ to $$112,500$ between Year $1$ and Year $2.$

Statement #$2$: Over the past two years, Cute Camel Woodcraft Company has relied more on the use of short$-$term debt than on long$-$term debt financing.

This statement is $,$ because:

Cute Camel$$s total current liabilities decreased by $$3,125,$ while its long$-$term debt account decreased by $$9,375.$

Cute Camel$$s total notes payable increased by $$781,$ while its common stock account increased by $$24,375.$

Cute Camel$$s total current liabilities increased by $$3,125,$ while its use of long$-$term debt increased by $$9,375.$

Statement #$3$: The book value of one of Cute Camel$$s fixed assets is calculated as the original cost of the asset minus its annual depreciation expense.

This statement is $,$ because:

An asset$$s net book value is calculated by subtracting its accumulated depreciation expense from its total historic and installation costs.

An asset$$s net book value is calculated by subtracting its annual depreciation expense from its total historic and installation costs.

An asset$$s net book value is calculated by adding its annual depreciation expense to its total historic and installation costs.

Based on your understanding of the different items reported in the balance sheet and the information they provide, which statement regarding Cute Camel Woodcraft Company$$s balance sheet is consistent with U$.$S$.$ Generally Accepted Accounting Principles $($GAAP$)?$

The company$$s assets should be listed in the order in which they are to be converted into cash.

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.