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2. Balance sheet 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 $15,328 $4,612 Accounts receivable 2,109 1,688 Accounts payable Accruals $0 $0 293 0 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 $25,000 Total liabilities and equity $31,250 $25,000 Given the information in the preceding balance sheet-and assuming that Cold Goose Metal Works Inc. 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: Cold Goose's pool of relatively liquid assets, which are available to support the company's current and future sales, decreased from Year 1 to Year 2.

2. Balance sheet 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 $15,328 $4,612 Accounts receivable 2,109 1,688 Accounts payable Accruals $0 $0 293 0 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 $25,000 Total liabilities and equity $31,250 $25,000 Given the information in the preceding balance sheet-and assuming that Cold Goose Metal Works Inc. 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: Cold Goose's pool of relatively liquid assets, which are available to support the company's current and future sales, decreased from Year 1 to Year 2.

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 63P: Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture...
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2. Balance sheet 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 $15,328 $4,612 Accounts receivable 2,109 1,688 Accounts payable Accruals $0 $0 293 0 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 $25,000 Total liabilities and equity $31,250 $25,000 Given the information in the preceding balance sheet-and assuming that Cold Goose Metal Works Inc. 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: Cold Goose's pool of relatively liquid assets, which are available to support the company's current and future sales, decreased from Year 1 to Year 2.
Transcribed Image Text:2. Balance sheet 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 $15,328 $4,612 Accounts receivable 2,109 1,688 Accounts payable Accruals $0 $0 293 0 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 $25,000 Total liabilities and equity $31,250 $25,000 Given the information in the preceding balance sheet-and assuming that Cold Goose Metal Works Inc. 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: Cold Goose's pool of relatively liquid assets, which are available to support the company's current and future sales, decreased from Year 1 to Year 2.
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