Statement \$2: In Year 2, Cute Camel Woodcraft Company was profitable. This statement is because: The cast uivalents account increased between Years 1 and 2 Cute Ca al assets increased between Years 1 and 2 Cute Camel's retained earnings account increased between the end of Years 1 a Statement \#3: If Cute Camel ever goes bankrupt, its common stockholders wal be pald off first, then its debtholders and preferred stockholders. This statement is becouse: Debtholders are treated as residual investors Debtholders and peferred shareholders are considered residual investon Common shareheiders are treated as residual investors Based on vour understanding of the different items reported on the balance sheet same, then the cash and equivalents item on the current balance aheet is bisoly to common stock. ay provide, it evervthing else remains the If the firm isues $3 mullion of new Statement \#3: If Cute Camel ever goes bankrupt, its common stockhoiders will be paid off first, then its debthoiders and preferred stockholders. This statement is because: Debtholh ited as residual investors Debthol ferred shareholders are considered residual investors Common shareholders are treated as residual investoes Statement \#1: Cute Camel's pool of reiatively liquid assets, which are available to support the company's current and future sales, decreased from Year 1 to Year 2 . This statement is because: Cute cal al current asset balance actually increased from $15,750 million to $19,687 million between Year 1 and Year 2 Cute ce al current liabilities balance increased from $2,363 million to $2,953 milion between Year 1 and Year 2 Cute Camel's total current liabilities balance decreased by $3,937 million between Year 1 and Year 2 2. Balance sheet 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. Cute Camel Woodcraft 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 yeac, some parts are still incomplete. Use the information given to complete the balance sheet. Gwen the informatiog in the preceding belance vheet-and assuming that Cute Camel Woodcraft Compacy has 50 million shares of cemmon stock eutstanding-read each of the foliowing statements, then identify the selection that best interprets the information conveyed by the balance sheet
