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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

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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. 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 2 Year 1 Assets Liabilities and equity Current assets: Current liabilities: Cash and equivalents Accounts payable $4,612 $0 $0 Accounts receivable 2,109 Accruals 1,688 293 Inventories 6,187 4,950 Notes payable 1,660 1,562 Total current assets $14,062 $11,250 Total current liabilities $1,562 Net fixed assets: Long-term debt 5,859 4,688 Net plant and equipment $13,750 Total debt $7,812 $6,250 Common equity: Common stock 15,235 12,188 Retained earnings 6,562 Total common equity $23,438 $18,750 Total assets $31,250 Total liabilities and equity $25,000 $25,000 $31,250 Given the information in the preceding balance sheet-and assuming that Cold Goose Metal Works Inc. has 50 million shares of common stock Statement #1:Cold Goose's net collection of inventory items increased by more than the firm sold between Years 1 and 2. This statement is because: Total inventories of raw materials, work-in-process, and final goods increased from $4,950 million to $6,187 million between Year 1 and Year 2 The accruals balance decreased by $293 million between Years 1 and 2 Total inventories of raw materials, work-in-process, and final goods decreased by $1,237 million between Year 1 and Year 2 Statement # 2 : In Year 2, Cold Goose Metal Works Inc. was profitable. This statement is because: Cold Goose's total assets increased between Years 1 and 2 The cash and equivalents account increased between Years 1 and2 Cold Goose's retained earnings account increased between the end of Years 1 and 2 Statement #3: If Cold Goose ever goes bankrupt, its ommon stockholders will be paid off first, then its debtholders and preferred stockholders. This statement is because: Common shareholders are treated as residual investors Debtholders are treated as residual investors Debtholders and preferred shareholders are considered residual investors 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.'s balance sheet is consistent with U.S. Generally Accepted Accounting Principles (GAAP)? The company's debts should be listed in order of their liquidity. The company's debts should be listed from those carrying the largest balance to those with the smallest balance. The company's debts are listed in the order in which they are to be repaid

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