Statement #1: Green Caterpillar's pool of relatively liquid assets, which are available to support the company's current and future sales, decreased from Year 1 to Year 2. This statement is false because: . Green Caterpillar's total current liabilities balance increased from $2,700 million to $3,375 million between Year 1 and Year 2 Green Caterpillar's total current asset balance actually increased from $18,000 million to $22,500 million between Year 1 and Year 2 Green Caterpillar's total current liabilities balance decreased by $4,500 million between Year 1 and Year 2 Statement #2: On December 31 of Year 2, Green Caterpillar Garden Supplies Inc, had $9,225 million of actual money that it could have spent immediately. This statement is true , because: The funds recorded in Green Caterpillar's accounts receivable account represents funds that are either cash or can be converted into cash almost immediately Green Catenars Year 2 cash and equivalents balance is $23.220 Statement #2: On December 31 of Year 2, Green Caterpillar Garden Supplies Inc. had $9,225 million of actual money that it could have spent immediately. This statement is true , because: The funds recorded in Green Caterpillar's accounts receivable account represents funds that are either cash or can be converted into cash almost immediately Green Caterpillar's Year 2 cash and equivalents balance is $23,220 The funds recorded in Green Caterpillar's cash and equivalents account represents funds that are either cash or can be converted into cash almost immediately Statement 3: The book value per share of Green Caterpillar's stock in Year 2 was $750.00. This statement is incorrect , because: The per-share book value is calculated by dividing the company's total debt by the number of outstanding shares of common stock The per-share book value is calculated by dividing the company's total common thanh The funds recorded in Green waterpillar's cash and equivalents account represents funds that are either cash or can be converted into cash almost immediately Statement #3: The book value per share of Green Caterpillar's stock in Year 2 was $750.00 This statement is incorrect because: The per share book value is calculated by dividing the company's total debt by the number of outstanding shares of common stock The per-share book value is calculated by dividing the company's total common equity by the number of outstanding shares of common stock The per-share book value is calculated by dividing the company's total assets by the number of outstanding shares of common stock Based on your understanding of the different items reported on the balance sheet and the information they provide, if everything else remains the same, then the cash and equivalents item on the current balance sheet is likely to If the firm issues $3 million of new common stock Green Caterpillar Garden Supplies 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 $9,225 $7,380 Accounts payable Accounts receivable 3,375 2,700 Accruals Inventories 9,900 7,920 Notes payable 2,656 2,500 Total current assets $22,500 $18,000 Total current liabilities $3,125 $2,500 Net fixed assets: Long-term debt 9,375 7,500 Net plant and equipment $27,500 $22,000 Total debt $12.500 $10,000 Common equity: Common stock 24.375 19,500 Retained earnings 13,125 10,500 Total common equity $37,500 $30,000 Total assets $50,000 $40,000 Total abilities and equity $50,000 $40,000 Given the information in the preceding balance sheet-and assuming that Green Caterpillar Garden Supplies 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
