Cold Goose Metal Works 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 $3,459 $2,767 Accounts payable $0 $0 Accounts receivable 1,266 1,013 Accruals 176 0 Inventories 3,712 2,970 Notes payable 996 937 Total current assets $8,437 $6,750 Total current liabilities $1,172 $937 Net fixed assets: Long-term debt 3,515 2,813 Net plant and equipment $10,313 $8,250 Total debt $4,687 $3,750 Common equity: Common stock 9,141 7,313 Retained earnings 4,922 3,937 Total common equity $14,063 $11,250 Total assets $18,750 $15,000 Total liabilities and equity $18,750 $15,000 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's sales between Years 1 and 2. This statement is , because: Total inventories of raw materials, work-in-process, and final goods decreased by $742 million between Year 1 and Year 2 The accruals balance decreased by $176 million between Years 1 and 2 Total inventories of raw materials, work-in-process, and final goods increased from $2,970 million to $3,712 million between Year 1 and Year 2 Statement #2: Over the past two years, Cold Goose Metal Works Inc. has relied more on the use of short-term debt than on long-term debt financing. This statement is , because: Cold Goose's total current liabilities increased by $235 million, while its use of long-term debt increased by $702 million Cold Goose's total notes payable increased by $59 million, while its common stock account increased by $1,828 million Cold Goose's total current liabilities decreased by $235 million, while its long-term debt account decreased by $702 million Statement #3: The book value of one of Cold Goose'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 co: 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 Goose Metal Works Inc.'s balance sheet is consistent with U.S. Generally Accepted Accounting Principles (GAAP)? The company's assets should be listed in alphabetical order. 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 the order in which they are to be converted into cash.