statement 1: cold gooses accumulated owed financial obligarions decreased from year 1 to year 2

Chapter 2 Homework 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. Cold Goose Metal Works 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: Cold Goose Metal Works Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 1 Assets 50 293 0 Current assets Cash and equivalents Accounts receivable Inventories Total current assets Net fixed assets: Not plant and equipment $5.766 2,109 6,18% $14,062 $4,612 1,688 4,950 $11,250 1,562 $1,562 Year 2 Liabilities and equity Current liabilities: Accounts payable $0 Accruals Notes payable 1,660 Total current liabilities Long term det 5,859 Total debt $7,812 Common equity! Common stock 15,235 Retained earnings Total common equity $23.4 Total liabilities and equity $31,750 4,688 56,250 $13,750 12.10 6,562 $18,750 $25,000 Total assets $31,250 $25,000 Given the information in the preceding balance sheet-and assuming that Cold Goose Metal Works 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 This statement is because: Notes payable actually increased from $1,660 million to $1,562 million between Years 1 and 2 Long term debe decreased from $1,600 million at the end of You 1 to $1,562 million by the end of Year 2 Accruals actually increased from so in Year 1 to $293 million at the end of Year 2 Statement #2: Over the past two years, Cold Goose Metal Works Inc. has reled more on the use of short-term debt than on kog-term debt financing This stment is because O cold Goose's total notes payable increased by $98 milion, while its common stock account increased by 53,047 million Cold Goose's total current habilities increased by $391 million, while its use of long-term debt increased by $1,171 million Cold Goose's total current liabilities decreased by $991 million, while its long term debit account decreased by SI,17 million Statement #3: One way to interpret the change in Cold Goose's accounts receivable balance from Year 1 to Year 2 that more customers purchased new items on credit rather than paying off existing credit accounts This statement is because The 5421 million increase an accounts receivable means either that your existing credit customers are not paying off their owed balances and new or existing customers are making additional purchases on credit, or that Year 1 credit customers have read the owed balances and Year 2 credit sales have exceeded Year 1 credit sales The decrease from $2,109 million to 51,088 million implies a net decrease in accounts receivable and that more customers are paying off their receivables balances than are buying on credit The change from $4.950 milion to 56,167 million reflects a nemecumulation of new credit sales Based on your understanding of the different items reported on the balance sheet and the information they provide, which statement regarding Cold Goose Metal Works Inc. is balance sheet is consistent with U.S. Generally Accepted Accounting Principles (GAAP) The company's debts are listed in the order in which they are to be repais 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