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. Green Caterpillar Garden Supplies 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 sheets for Green Caterpillar Garden Supplies Inc. for the years ending December 31, Year 2 and 1, respectively. Green Caterpillar Garden Supplies Inc. Balance Sheet For the Year ended December 31 Year 2 Year 1 Year 1 Year 2 Assets Current assets: Cash and equivalents $0 $4,688 $26,562 $0 Accounts receivable $73,800 $27,000 $79,200 $180,000 $33,750 $99,000 $225,000 Inventories Total current assets Liabilities and equity Current liabilities: Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total debt Common equity: Common stock Retained earnings Total common equity Total liabilities and equity $25,000 $25,000 $75,000 $100,000 $93,750 $125,000 Net fixed assets: Net plant and equipment $220,000 $243,750 $195,000 $105,000 $300,000 $400,000 $375,000 $500,000 $500,000 $400,000 Total common equity Total liabilities and equity $375,000 $500,000 $300,000 $400,000 Total assets $500,000 $400,000 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 Statement #1: Green Caterpillar's accumulated owed financial obligations decreased from Year 1 to Year 2. This statement is because: Long-term debt decreased from $26,562 at the end of Year 1 to $25,000 by the end of Year 2. Notes payable actually increased from $26,562 to $25,000 between Years 1 and 2 The accounts payable account remained $0 for both Years 1 and 2. Accruals actually increased from $0 in Year 1 to $4,688 at the end of Year 2. Statement #2: Over the past two years, Green Caterpillar Garden Supplies Inc. has relied more on the use of short-term debt than on long-term debt financing. This statement is , because: Green Caterpillar's total current liabilities decreased by $6,250, while its long-term debt account decreased by $18,750. Green Caterpillar's total notes payable increased by $1,562, while its common stock account increased by $48,750. Green Caterpillar's total current liabilities increased by $6,250, while its use of long-term debt increased by $18,750. Statement #3: If Green Caterpillar ever goes bankrupt, its common stockholders will be paid off first, then its debtholders and preferred stockholders. This statement is because: Common shareholders are treated as residual investors Debtholders and preferred shareholders are considered residual investors Debtholders are treated as residual investors Statement #3: If Green Caterpillar ever goes bankrupt, its common stockholders will be paid off first, then its debtholders and preferred stockholders. This statement is , because: Common shareholders are treated as residual investors Debtholders and preferred shareholders are considered residual investors Debtholders are treated as residual investors Based on your understanding of the different items reported in the balance sheet and the information they provide, which statement regarding Green Caterpillar Garden Supplies Inc.'s balance sheet is consistent with U.S. Generally Accepted Accounting Principles (GAAP)? The company's assets should be listed in alphabetical order. The company's assets should be listed from those carrying the largest balance to those with the smallest balance. The company's assets should be listed in the order in which they are to be converted into cash