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Fuzzy Button Clothing Company Balance Sheet for Year Ending Dec. 31 (Millions of Dollars) 1. Fill in the (????) for Cash & Equivalents, Net Plant/Equip,

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

1. Fill in the (????) for Cash & Equivalents, 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 & Equivalents

????

$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 Button's 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. Year 2 cash & equivalents balance is $6,385

C. The funds recorded in cash & equivalents accounts represents funds that are either cash or can be converted into cash almost immediately

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 company's total common equity by the number of outstanding shares of common stock

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

C. The per share book value is calculated by dividing the company's total assets by the number of outstanding shares of common stock

5. Which statement regarding the company's balance sheet is consistent with U.S. GAAP?

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

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

C. The company's assets should be listed in alphabetical order

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