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. Cute Camel Woodcraft Company 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 $3,690 Accounts payable $0 $0 Accounts receivable 1,688 1,350 Accruals 234 0 Inventories 4,950 3,960 Notes payable 1,328 1,250 Total current assets $11,250 $9,000 Total current liabilities $1,250 Net fixed assets: Long-term debt 4,688 3,750 Net plant and equipment $11,000 Total debt $6,250 $5,000 Common equity: Common stock 12,188 9,750 Retained earnings 5,250 Total common equity $18,750 $15,000 Total assets $25,000 $20,000 Total liabilities and equity $25,000 $20,000 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: 1 Cute Camel's total current asset balance actually increased from $9,000 million to $11,250 million between Year 1 and Year 2 Cute Camel's total current liabilities balance increased from $1,350 million to $1,688 million between Year 1 and Year 2 O Cute Camel's total current liabilities balance decreased by $2,250 million 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 increased by $312 million, while its use of long-term debt increased by $938 million Cute Camel's total current liabilities decreased by $312 million, while its long-term debt account decreased by $938 million Cute Camel's total notes payable increased by $78 million, while its common stock account increased by $2,438 million Statement #3: One way to interpret the change in Cute Camel's accounts receivable balance from Year 1 to Year 2 is that more customers purchased new items on credit rather than paying off existing credit accounts. This statement is because: The change from $3,960 million to $4,950 million reflects a net accumulation of new credit sales The decrease from $1,688 million to $1,350 million implies a net decrease in accounts receivable and that more customers are paying off their receivables balances than are buying on credit The $338 increase in accounts receivable means either that Year 1's existing credit customers are not paying off their owed balances and new or existing customers are making additional purchases on credit, or that Year 1's credit customers have repaid their owed balances and Year 2 credit sales have exceeded Year 1's credit sales 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 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