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		$6,457	Accounts payable	$0	$0
Accounts receivable	$2,953	$2,363	Accruals	$410	$0
Inventories	$8,662	$6,930	Notes payable	$2,324	$2,187
Total current assets	$19,687	$15,750	Total current liabilities	???	$2,187
Net fixed assets:			Long-term debt	$8,203	$6,563
Net plant and equipment	???	$19,250	Total debt	$10,937	$8,750
			Common equity:
			Common stock	$21,328	$17,063
			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 sheetand assuming that Cute Camel Woodcraft Company has 50 million shares of common stock outstandingread each of the following statements, then identify the selection that best interprets the information conveyed by the balance sheet.

Statement #1: Cute Camels accumulated owed financial obligations decreased from Year 1 to Year 2.

This statement is Correct/Incorrect , because:

A. Accruals actually increased from $0 in Year 1 to $410 million at the end of Year 2.

B. Notes payable actually increased from $2,324 million to $2,187 million between Years 1 and 2.

C. The accounts payable account remained $0 for both Years 1 and 2.

Statement #2: In Year 2, Cute Camel Woodcraft Company was profitable.

This statement is Correct/Incorrect , because:

A. Cute Camels total assets increased between Years 1 and 2.

B. Cute Camels retained earnings account increased between the end of Years 1 and 2.

C. The cash and equivalents account increased between Years 1 and 2.

Statement #3: The book value per share of Cute Camels stock in Year 2 was $656.26.

This statement is Correct/Incorrect , because:

A. The per-share book value is calculated by dividing the companys total assets by the number of outstanding shares of common stock.

B. The per-share book value is calculated by dividing the companys total debt by the number of outstanding shares of common stock.

C. The per-share book value is calculated by dividing the companys total common equity by the number of outstanding shares of common stock.

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

A. The companys debts should be listed in order of their liquidity.

B. The companys debts should be listed from those carrying the largest balance to those with the smallest balance.

C. The companys debts are listed in the order in which they are to be repaid.