December 31, 2020. On this date, the company has the following assets (fair value is based on dis- balance of S670.000 also is reported. The owners will distribute 30,000 shares of this stock as part Smith has 50,000 shares of $10 par value common stock outstanding. A deficit retained earnings proceeding. 43. Smith Corporation has gone through bankruptcy and is ready to emerge as a on counting the anticipated future cash flows): Accounts receivable.. Inventory. Land and buildings Machinery.. Patents Book Value $ 20,000 143,000 250,000 144,000 100,000 Fair Value $ 18,000 111,000 278,000 121,000 125,000 The company has a reorganization value of $800,000. . . . of the reorganization plan. The company's liabilities will be settled as follows: Accounts payable of $180,000 (existing at the date on which the order for relief was granted) will be settled with an 8 percent, two-year note for $35,000. Accounts payable of $97,000 (incurred since the date on which the order for relief was granted) will be paid in the regular course of business. Note payable-First Metropolitan Bank of $200,000 will be settled with an 8 percent, live year note for $50,000 and 15,000 shares of the stock contributed by the owners. Note payable-Northwestern Bank of Tulsa of $350,000 will be settled with a 7 percent, eighie. year note for $100,000 and 15,000 shares of the stock contributed by the owners. a. How does Smith Corporation's accountant know that fresh start accounting must be utilized b. Prepare a balance sheet for Smith Corporation upon its emergence from reorganization. 1. fallowing information