The balance sheet provides a snapshot of the financial condition of a company. I

Question

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 nce Blue Hamster Manufacturing Inc. is a h its first year of operation. For the second year, some parts are still incomplete. Use the information given to complete the balance sheet. I company. Suppose it has the following balance sheet items reported at the end of Blue Hamster Manufacturing Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Assets Liabilities and equity Current liabilities Current assets $2,767 Accounts payable Accounts receivable Inventories 1,266 3,712 $8,437 176 1,013 Accruals 2,970 Notes payable $6,750 Total current liabilities 937 Total current assets Long-term debt 3,515 $4,687 Net fixed assets: Net plant and equipment $8,250 Total debt $3,750 Common equity Common stock Retained earnings 3,937 Total common equity 14,063 12s0 Total assets $18,750 $18,750 $15,000 Given the information in the preceding balance sheet-and assuming that Blue Hamster Manufacturing Inc. has s0 million shares of common stock outstanding-read each of the following statements, then identify t conveyed by the balance she tion that best interprets the inform O Type here to s

Explanation / Answer

Calculation Year2 Year1 Year2 Year1 Calculation Current Assets: Liabilities and equity (8437-1266-3712) Cash and equivalent $3,459 $2,767 Current Liabilities: Accont receivable $1,266 $1,013 Accounts payable $0 $0 Inventories $3,712 $2,970 Accruals $176 $0 Total current assets $8,437 $6,750 Notes Payable $996 $937 Net fixed Assets: Total Current Liabilities $1,172 $937 (176+996) (18750-8437) Net plant and equipment $10,313 $8,250 Long term debt $3,515 $2,813 Total Assets $18,750 $15,000 Total Debt $4,687 $3,750 Common Equity: Common stock $9,141 $7,313 Retain earnings $4,922 $3,937 (14063-9141) Total common Equity $14,063 $11,250 Total liabilities and equities $18,750 $15,000 Statement #1 Total inventories of raw materials,workin process and finished goods increased from $2970millionto $3712 million Statement #2 Retained Earnings Account increased betweenyear 1 and year 2 Retained Earnings in Year 2=(Retained earning in year1+Profit of Year 2 -Dividends ) Statement #3 An asset's bookvalue is calculated by subtracting its accumulated depreciation from its total historic and installation costs

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.