what is the answer to the following: thanks for the help
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. 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 Manufacturing Inc. Balance Sheet for Year Ending December 31 {Millions of Dollars) Year 2 Year 1 Year 2 Year 1 Assets Liabilities and equity:r Current assets: Current liabilities: Cash and equivalents $2.952 Accounts payable $0 $0 Accounts receivable 1,350 1,080 Accruals 18B 0 Inventories 3,950 3,158 thes payable 1,052 1,000 Total current assets $9.0m: $1200 Total current Iiabilias $1,000 Net fixed assets: Long-term debt 3,?50 3,000 Net plant and equipment 7 $11,000 $8,800 Total debt $5,000 $4,000 Common equity: Common stock 9,250 2,800 Retained earnings 1' 5,250 4,200 Total common equity $15,000 $12,000 Total assets $20,000 $10,000 Total liabilities and equity $20,000 $16,000 Given the information in the preceding balance sheetand assuming that Blue Hamster Manufacturing Inc. has 5:] million shares of common stock outstandingread 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 sold between Years 1 and 2. This statement is , because: 0 The accruals balance decreased by $133 million between Years 1 and 2 0 Total inventories of raw materials, work-in-process, and final goods increased from $3.168 million to $3.960 million between Year 1 and Year 2 O The accounts receivable balance increased by $220 million between Years 1 and 2 Statement #2: In Year 2, Blue Hamster Manufacturing Inc. was protable. This statement is , because: 0 Blue Hamster's total assets increased between Years 1 and 2 0 Blue Hamster's retained earnings account increased between the end of Years 1 and 2 O The cash and equivalents account increased between Years 1 and 2 Statement #3: One way,' to interpret the change in Blue Hamster's accounts receivable balance from Year 1 to Year 2 is that more customers purchased new items on credit rather than paying off existing credit accounts. This statement is , because: 0 The decrease from $1,350 million to $1,030 million implies a net decrease in accounts receivable and that more customers are paying off their receivables balances than are buying on credit 0 The change from $3,168 million to $3,960 million reects a net accumulation of new credit sales 0 The $2?0 increase in accounts receivable means either that Year 1's existing credit customers are not paying off their owed balances and new or existing customers are making additional purchases on credit, or that Year 1's credit customers have repaid their owed balances and Year 2 credit sales have exceeded Year 1's credit sales 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 cunent balance sheet is likely to if the firm issues $3 million of new common stock. Statement #3: One wag.I to interpret the change in Blue Hamster's accounts receivable balance from Year 1 to Year 2 is that more customers purchased new items on credit rather than paying off existing credit accounts. This statement is , because: 0 The decrease from $1,350 million to $1.030 million implies a net decrease in accounts receivable and that more customers are paying off their receivables balances than are buying on credit 0 The change from $3,168 million to $3.960 million reects a net accumulation of new credit sales 0 The $2?0 increase in accounts receivable means either that Year 1's existing credit customers are not paying off their owed balances and new or existing customers are making additional purchases on credit, or that Year 1's credit customers have repaid their owed balances and Year 2 credit sales have exceeded Year 1's credit sales 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. increase decrease remain the same
