Jy te trustee s transactions for the per 11 Financial Statement Display of Items During Reorganization Francona Corporation is und going reorganization under the provisions of Chapter 11 of the Bankruptcy Code. Francona is currentl continuing in operation as a debtor in possession while a plan of reorganization is developed. The follo ing occurred during the reorganization period 1. Unsecured liabilities existing at the time of filing the petition for reorganization are $2,500,000. The full amount of these liabilities is expected to be allowed by the court, although the eventual settle ment is projected to be about 70 percent of face value. $600,000 of these liabilities were previous reported as current, and the remainder were long-term liabilities Liabilities of $275,000 were incurred since filing the petition. These are all current liabilitics Legal costs connected with the reorganization process amounted to $100,000, paid in cash As part of the reorganization, sold equipment with a book value of $35,000 for $30,000 in cash As part of the reorganization, cancelled a contract to purchase a new machine and forfeited the com- pany's $40,000 deposit. Interest revenue of $30,000 is received in cash. Of this amount, $25,000 is interest on investmen cash accumulating due to the reorganization. Fully secured noncurrent loans payable existing at the time of filing the petition fo are $650,000. Noncurrent notes payable existing at the time of filing the reorganization petition, secured by prop erty with an estimated fair value of between $80,000 and $120,000, total $100,000 2. 3. 4. 5. 6. 8. Required For each item, identify the financial statement or statements where it would appear, its caption and amount, and its category. For example, if a liability appears on the balance sheet, indicate whether it is cat- egorized as subject to compromise or not, and whether it is displayed in current or noncurrent liabilities. Income statement items are either in the operating or reorganization section. Statement of cash flow items are either operating, investing, or financing, and may or may not be reorganization items