On January 2, 20X2, Hobbes Company files a petition for relief under Chapter 11 of the B ankruptcy Code Hobbes had disastrous operating performance during the recent recession and needs time to reestablish profitable operations. The trial balance on January 2, 20x2, follows Debit $15,600 65.300 102,700 620,400 Cash Accounts Receivable (net) Inventory Property, Plant, and Equipment Accumulated Depreciation Accounts Payable Notes Payable, 10% Bonds Payable, 12% Interest Payable Preferred Stock Common Stock, $1 par Additional Paid-In Capital Retained Earnings (deficit) $140,400 139,100 169,600 250,800 48,700 50.500 50.500 76,800 122.400 Total $926,400 $926,400 The following information applies to the 20X2 fiscal year ending December 31, 20X2. Hobbes is in reorganization proceedings for the entire year, and the plan of reorganization has not been approved as of December 31, 20X2. The debtor retained possession of the company during the year Income Data for 20X2: 1. Sales revenue of $246,100 is generated during the year 2. Cost of goods sold is $169,600 as a result of cost reduction programs implemented during the year 3. Selling, operating, and administrative expenses are $52,000 for the year 4. Interest expense is $5,400. Contractual interest would have been $54,100 for the year. 5. Reorganization items include $16,900 in fees paid to professionals and $4,400 of interest earned on cash accumulated as a result of the Chapter 11 proceedings 6. The income tax of $4,100 on operating income was paid during the yean 7. Discontinued operations included a $18,000 loss on operations, net of tax, and a $8,000 gain on the sale of assets, net of tax. The bankruptcy court administered the sale of the assets under the Chapter 11 proceedings Cash Flow Data for 20X2: 1. A total of $265,700 is received from customers. This includes $19,600 received on the accounts receivable that were outstanding prior to filing the petition 2. A total of $206,600 is paid to suppliers, employees, and others for operations 3. The current interest expense of $5,400 on postpetition debt is paid during the year 4. Professional fees of $16,900 are paid, and interest on cash accumulations of $4,400 is received 5. Net cash used by discontinued operations, excluding the sale of assets, is $4,400 6. The proceeds from the sale of the discontinued assets is $19,600. The bankruptcy court administered this sale 7. Hobbes borrowed $10,700 in short-term debt as part of a financing plan administered by the court. 8. The court authorized a payment of $10,700 on the bonds payable. The ending cash balance of $72,000 represents an increase of 556,400 during the year Other Data for 20X2: 1. Careful working capital management reduced the ending inventory to $89,400. Continued reduction is expected in 20X3 2. The property, plant, and equipment, net of accumulated depreciation, at the end of 20X2 totaled $459,000 3. In addition to the $10,700 short-term borrowings that are part of the court-approved financing plan Hobbes has postpetition accounts payable of $10,000 equired: a. Prepare the income statement for Hobbes for the year ending December 31, 20X2