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 finandal statements to make several interpretations regarding the company's financial condition and performance. Blue Hamster Manufacturing 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. Blue Hamster Manufacturina Inc. Balance Sheet for Year Endina Dacamhar 21 (millinne af nallare) Given the information in the preceding balance sheet-and assuming that Blue Hamster Manufacturing Inc. has 50 miliion 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: Blue Hamster's net collection of inventory items increased by more than the firm's sales between Years 1 and 2. This statement is because: Total inventories of raw materials, work-in-process, and final goods decreased by $990 milion between Year 1 and Year 2 The accruals balance decreased by $234 million between Years 1 and 2 Total inventories of raw materials, work-in-process, and final goods increased from $3,960 million to $4,950 million between Year 1 and Year 2 Statement #2: Over the past two yearspelue Hamster Manufacturing Inc. has relied more on the use of short-term debt than on long. term debt financing. This statement is because: Blue Hamster's total notes pavable increased by $78 milion, while its common stock account increased by $2,438 million Blue Hamster's total current fiabilities decreased by $312 milion, while its long-term debt account decreased by $938 million Elue Hamster's total current liabilities increased by $312 malian, while its use of long-term debt increased by 5938m illion Statement #3: The book value per share of Blue Hamster's stock in Year 2 was $375.00. This statement is , because: 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 The per-share book value is calculated by dividing the company's total debt by the number of outstanding shares of cornmon stock Based on your understanding of the different items reported in the balance sheet and the information they mrovide, which statement regarding Blue Hamster Manifacturing Incis balance sheet is consistent with U.S. Generally Accepted Accounting Principes (GAAP)? The company's assets should be listed from those carrying the largest baiance to those with the smaliest balance. The company's assets should be listed in alphabetical ordek. The company's assets should be listed in the order in which they are to be converted into cash
