60.1K

Verified Solution

Link Copied!

Given the information in the preceding balance sheet-and assuming that Blue Hamster Manufacturing 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. The balance sheet provides a snapshot of the finandal 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. Statement a 3: The book value of one of Blue Mamster's fixed assets is calculated as the criginal cost of the asset minus its annual deprediation expense. This statement is , because: An asset's net book value is calculated by subtracting its accumulated depreciation expense from its total historic and installation costs An asset's net book value is calculated by subtracting its annual depredation expensen from its total historic and installation costs An asset's net book value is calculated by adding its annual depreciation expense to its total historic and installatloo costs Based on your understanding of the different items reported on the balance sheet and the information they provide, if everything else remains the sarne, then the cash and equivalents item on the current balance sheet is likely to if the firm increases the dividends paid on its common stock. Statement \#2: Over the past two years, Blue Hamster Manufacturing Inc. has relied more on the use of short-term debt than on longterm debt finanding. This staternent is because: Blue Hamster's total current liabilities increased by $547 million, while its use of long term debt increased by $1,640 million Blue Hamster's total notes payable increased by $137 million, while its common stock account increased by $4,265 million Blue Hamster's total current liabilities decreased by $547 million, while its long-term debt account decreased by $1,640 million Statement =3; The book value of one of Blue Hamster's fixed assets is calculated as the original cost of the asset minus its annual deprediation expense. Statement \# 1: Blue Hamster's net collection of inventory items increased by more than the firm's sales between Years 1 and 2. This staternent is because: The accruals balance decreased by $410 million between Years 1 and 2 Total inventories of raw material5, work-in-process, and final goods decreased by $1,732 million between Year 1 and Year 2 Total inventories of raw materials, work-in-process, and final goods increased from $6,930 million to $8,662 million between Year 1 and Year 2 Given the information in the preceding balance sheet-and assuming that Blue Hamster Manufacturing 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. The balance sheet provides a snapshot of the finandal 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. Statement a 3: The book value of one of Blue Mamster's fixed assets is calculated as the criginal cost of the asset minus its annual deprediation expense. This statement is , because: An asset's net book value is calculated by subtracting its accumulated depreciation expense from its total historic and installation costs An asset's net book value is calculated by subtracting its annual depredation expensen from its total historic and installation costs An asset's net book value is calculated by adding its annual depreciation expense to its total historic and installatloo costs Based on your understanding of the different items reported on the balance sheet and the information they provide, if everything else remains the sarne, then the cash and equivalents item on the current balance sheet is likely to if the firm increases the dividends paid on its common stock. Statement \#2: Over the past two years, Blue Hamster Manufacturing Inc. has relied more on the use of short-term debt than on longterm debt finanding. This staternent is because: Blue Hamster's total current liabilities increased by $547 million, while its use of long term debt increased by $1,640 million Blue Hamster's total notes payable increased by $137 million, while its common stock account increased by $4,265 million Blue Hamster's total current liabilities decreased by $547 million, while its long-term debt account decreased by $1,640 million Statement =3; The book value of one of Blue Hamster's fixed assets is calculated as the original cost of the asset minus its annual deprediation expense. Statement \# 1: Blue Hamster's net collection of inventory items increased by more than the firm's sales between Years 1 and 2. This staternent is because: The accruals balance decreased by $410 million between Years 1 and 2 Total inventories of raw material5, work-in-process, and final goods decreased by $1,732 million between Year 1 and Year 2 Total inventories of raw materials, work-in-process, and final goods increased from $6,930 million to $8,662 million between Year 1 and Year 2

Answer & Explanation Solved by verified expert

See Answer