0&quiz-actions takeQuiz&qu izprobGuid-QNAPC0A801 01 000000425f8dd0050000&ck=m-15
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0&quiz-actions takeQuiz&qu izprobGuid-QNAPC0A801 01 000000425f8dd0050000&ck=m-153599 1 430931-0AAA6B0401 65062403 Attempts: Do No Harm: /11 2. Balance sheet Aa Aa 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 year, some parts are still incomplete. Use the information given to complete the balance sheet. Cute Camel Woodcraft Company Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Year 1 Assets Current assets: Liabilities and equity Current liabilities $3,690 Accounts payable Cash and equivalents Accounts receivable Inventories $0 234 $0 1,350 Accruals 3,960 Notes payable 4,950 $11,250 $9,000 Total current liabilities 1,250 $1,250 3,750 $6,250$5,000 Total current assets Net fixed assets: Long-term debt 4,688 Net plant and equipment$11,000 Total debt Common equity: Common stock Retained earnings 12,188 9,750 5,250 $18,750 $15,000 $25,000$20,000 Total common equity Total liabilities and equity Total assets $25,000 $20,000 Given the information in the preceding balance sheet-and assuming that Cute Camel Woodcraft Company 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 : Cute Camel's accumulated owed financial obligations decreased from Year 1 to Year 2. This statement is because O Accruals actually increased from $o in Year 1 to $234 million at the end of Year 2 O Long-term debt decreased from $1,328 million at the end of Year 1 to $1,250 million by the end of Year 2 O The accounts payable account remained $0 for both Years 1 and 2Explanation / Answer
Year 2:
Cash = Total Current Assets- Accounts Receivable - Inventories = 11250-1688-4950 = 4612
NPPE = Total Assets-Total Current Assets= 25000-11250=13250
Total Current Liablities= Accounts Payable +Accruals + Notes Payable = 1328+234+0= 1562
Retained Earnings= Total CommonEquity - Common Stock = 18750-12188= 6562
Statement 1:
The statement is false because financials obligations increased due to increase in notes payable, accruals and long term debt. Hence first option is correct since accruals increased by 234 from year 1 to 2
Statement 2.
As calculated above the ending year 2 cash for the company is 4612. Hence the statement is True.
Statement is true because this represents Cute Carmel's cash and Cash equivalent which can be spent immediately.
Statement 3.
Book value per share= Shareholder's equity (total common equity)/No of shares outstanding = 18750/50= 375
The statement is True.Option B is correct since it states the same formula mentioned above
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