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The balance sheet provides a snapshot of the financial condition of a company. Investors and analysts use the information given on the balance sheet and other financial statements to make several interpretations regarding the company's financial condition and performance. Blue Hamster Manufacturing Inc. 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 sheet. Blue Hamster Manufacturing Inc. 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 $0 $0 Accounts payable Accruals Accounts receivable 1,688 1,350 234 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 liabilities $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 Blue Hamster Manufacturing Inc. 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: Blue Hamster's accumulated owed financial obligations decreased from Year 1 to Year 2. This statement is , because: O The accounts payable account remained $0 for both Years 1 and 2. Notes payable actually increased from $1,328 million to $1,250 million between Years 1 and 2. O Accruals actually increased from $0 in Year 1 to $234 million at the end of Year 2. Statement #2: On December 31 of Year 2, Blue Hamster Manufacturing Inc. had $4,612 million of actual money that it could have spent immediately. This statement is because: The funds recorded in Blue Hamster's accounts receivable account represents funds that are either cash or can be converted into cash almost immediately. O Blue Hamster's Year 2 cash and equivalents balance is $11,610. funds that either cash be converted cash O The funds recorded in Blue Hamster's cash and equivalents account almost immediately. Statement #3: If Blue Hamster ever goes bankrupt, its common shareholders will be paid off first, then its debtholders and preferred stockholders. This statement is , because: O Debtholders are treated as residual investors. Debtholders and preferred shareholders are considered residual investors. O Common shareholders are treated as residual investors. Based on your understanding of the different items reported on the balance sheet and the information they provide, which statement regarding Blue Hamster Manufacturing Inc.'s balance sheet is consistent with U.S. Generally Accepted Accounting Principles (GAAP)? O The company's debts are listed in the order in which they are be repaid. The company's debts should be listed from those carrying the largest balance to those with the smallest balance. The company's debts should be listed in order of their liquidity