Hilfmir Corporation filed for Chapter 11 bankruptcy on January 1, 2014. A summary of their financial status is shown below on June 30, 2014, at the date of the approved reorganization, along with the fair value of their assets.

Per Books Fair Value

Cash $ 134,000 $ 134,000

A/R - net 20,000 20,000

Inventory 32,000 40,000

Plant Assets - net 114,000 106,000

Patent 80,000 0

$ 380,000

A/P $ 60,000

Wages Payable 20,000

Prepetition liab. 250,000

Common Stock 140,000

Deficit (90,000)

$ 380,000

Under the reorganization plan, the reorganization value has been set at $320,000. Prepetition liabilities include $30,000 of trade Accounts Payable and a $220,000 Note Payable to Bigg Bank. The reorganization plan calls for the Prepetition accounts payable to be paid at 80% at a later date, and the Note Payable for $220,000 to be replaced by a Note Payable for $76,000 and the issuance of common stock of the new entity for $100,000. The former stockholders will receive $40,000 in common stock of the new entity, Hilfmir, in exchange for their shares.

Required: Show the calculations to determine if Hilfmir is eligible for fresh-start accounting, and prepare freshstart balance sheet for the new entity, Hilfmir, as of July 1, 2014.