I got the answers that I needed to fill in on the balance sheet, however I need help with these statements that are to follow. Please and thank you!

Fuzzy Button Clothing Company is a hypothetical 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 sheets for Fuzzy Button Clothing Company for the years ending December 31, Year 2 and 1, respectively. Fuzzy Button Clothing Company Balance Sheet For the Year ended December 31 Year 2 Year 2 Year 1 $138,375 $0 $0 $50,625 $7,031 $0 Assets Current assets: Cash and equivalents Accounts receivable Inventories Total current assets Net fixed assets: Net plant and equipment $37,500 $148,500 $337,500 $39,844 $46,875 $37.500 Year 1 Liabilities and equity Current liabilities: $110,700 Accounts payable $40,500 Accruals $118,800 Notes payable $270,000 Total current liabilities Long-term debt $330,000 Total debt Common equity: Common stock Retained earnings Total common equity $600,000 Total liabilities and equity $412,500 $140,625 $187,500 $112.500 $150,000 $365,625 $196,875 $562,500 $750,000 $292,500 $157,500 $450,000 $600,000 Total assets $750,000 Given the information in the preceding balance sheet-and assuming that Puzzy Button Clothing 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 Given the information in the preceding balance sheet --and assuming that Fuzzy Button Clothing 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: Fuzzy Button's net collection of inventory items increased by more than the firm sold between Years 1 and 2. This statement is because: O The accruals balance decreased by $7,031 between Years 1 and 2. The accounts receivable balance increased by $10,125 between Years 1 and 2. Total inventories of raw materials, work-in-process, and final goods decreased by $29,700 between Year 1 and Year 2. Total inventories of raw materials, work-in-process, and final gonds increased from $118,800 to $148,500 between Year 1 and Year 2. Statement #2: In Year 2, Fuzzy Button Clothing Company was profitable. This statement is because: The cash and equivalents account increased between Years 1 and 2 Fuzzy Button's total assets increased between Years 1 and 2 Fuzzy Button's retained earnings account increased between the end of Years 1 and 2. Statement #3: One way to interpret the change in Fuzzy Button'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 $10,125 increase in accounts receivable means either that year I's existing credit customers are not paying off their owed balances and new or existing customers are making additional purchases on credt, or that year i's credit customers have repaid their owed balances and Year 2 credit sales have exceeded Year 1's credit sales. The change from $118,800 to $148,500 reflects a net accumulation of new credit sales The decrease from $50,625 to $40,500 implies a net decrease in accounts receivable and that more customers are paying off their receivables balances than are buying on credit Based on your understanding of the different items reported on the balance sheet and the information they provide, which statement regarding Furry Button Clothing Company's balance sheet is consistent with us. Generally accepted Accounting Principles (GAP)? The company's debts should be listed in order of their liquidity The company's debts should be listed from those carrying the largest balance to those with the sollet Dolance The company's debts are listed in the order in which they are to be repaid