Fuzzy Button Clothing Company Balance Sheet for Year Ending Dec. 31 (Millions of Dollars)

1. Fill in the (????) for Cash & Equiv, Net Plant/Equip, Total Current Liabilities & Retained Earnings on the Balance Sheet

	Year 2	Year 1			Year 2	Year 1
Assets				Liabilities & Equity
Current assets				Current liabilities
Cash & Equival	????	$2,029		Accts payable	$0	$0
Accounts Rec	$928	$743		Accruals	$129	$0
Inventories	$2,722	$2,178		Notes payable	$730	$687
Total Current Assets	$6,187	$4,950		Total current liabilities	????	$687
Net Fixed Assets:				Long term debt	$2,578	$2,063
Net Plant/Equip	????	$6,050		Total debt	$3,474	$2,750
				Common equity
				Common stock	$6,703	$5,363
				Retained earnings	????	$2,887
				Total common equity	$10,313	$8,250
Total Assets	$13,750	$11,000		Total liabilities & equity	$13,750	$11,000

Given the information in the balance sheet & assuming that the company has 50 million shares of common stock outstanding, read each of the following statements, then identify the selection the best interprets the information conveyed by the balance sheet. State whether the statement is true or false & pick the reason why between choices A C for the following:

2. Fuzzy Buttons accumulated owed financial obligations decreased from year 1 to year 2.

This statement is (TRUE/FALSE) because:

A. Accruals actually increased from $0 in year 1 to $129 million at the end of year 2

B. Long term debt decreased from $730 million at the end of year 1 to $687 million by the end of year 2

C. Notes payable actually increased from $730 million to $687 million between years 1 & 2

3. On Dec. 31 of year 2, Fuzzy Button Clothing Company had $2,537 million of actual money that it could have spent immediately.

This statement is (TRUE/FALSE) because:

A. The funds recorded in accounts receivable represents funds that are either cash or can be converted into cash almost immediately

B. Year2cash&equivalentsbalanceis$6,385

C. Thefundsrecordedincash&equivalentsaccountsrepresentsfundsthatareeithercashorcanbeconvertedintocashalmostimmediately

4. The book value per share of stock in year 2 was $206.26.

This statement is (TRUE/FALSE) because:

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

5. Which statement regarding the companys balance sheet is consistent with U.S. GAAP?

A. The companys assets should be listed in the order in which they are to be converted into cash

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

C. The companys assets should be listed in alphabetical order