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			Credit
Cash	$	15,400
Accounts Receivable (net)		65,800
Inventory		103,400
Property, Plant, and Equipment		620,300
Accumulated Depreciation				$	140,800
Accounts Payable					139,600
Notes Payable, 10%					168,000
Bonds Payable, 12%					250,700
Interest Payable					48,700
Preferred Stock					51,500
Common Stock, $1 par					51,500
Additional Paid-In Capital					76,300
Retained Earnings (deficit)		122,200
Total	$	927,100		$	927,100

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 $247,500 is generated during the year.
2.	Cost of goods sold is $168,000 as a result of cost reduction programs implemented during the year.
3.	Selling, operating, and administrative expenses are $51,500 for the year.
4.	Interest expense is $5,700. Contractual interest would have been $54,400 for the year.
5.	Reorganization items include $16,900 in fees paid to professionals and $4,000 of interest earned on cash accumulated as a result of the Chapter 11 proceedings.
6.	The income tax of $4,200 on operating income was paid during the year.
7.	Discontinued operations included a $17,000 loss on operations, net of tax, and a $7,800 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 $266,300 is received from customers. This includes $18,800 received on the accounts receivable that were outstanding prior to filing the petition.
2.	A total of $207,000 is paid to suppliers, employees, and others for operations.
3.	The current interest expense of $5,700 on postpetition debt is paid during the year.
4.	Professional fees of $16,900 are paid, and interest on cash accumulations of $4,000 is received.
5.	Net cash used by discontinued operations, excluding the sale of assets, is $4,000.
6.	The proceeds from the sale of the discontinued assets is $18,800. The bankruptcy court administered this sale.
7.	Hobbes borrowed $10,900 in short-term debt as part of a financing plan administered by the court.
8.	The court authorized a payment of $10,900 on the bonds payable. The ending cash balance of $70,900 represents an increase of $55,500 during the year.

Other Data for 20X2:

1.	Careful working capital management reduced the ending inventory to $89,200. Continued reduction is expected in 20X3.
2.	The property, plant, and equipment, net of accumulated depreciation, at the end of 20X2 totaled $462,200.
3.	In addition to the $10,900 short-term borrowings that are part of the court-approved financing plan, Hobbes has postpetition accounts payable of $9,200.

Required:

a.	Prepare the income statement for Hobbes for the year ending December 31, 20X2.

Please provide the formulas so I can learn how to do the problem.

Required: a. Prepare the income statement for Hobbes for the year ending December 31, 20X2 HOBBES COMPANY (Debtor-in-Possession) Income Statement For the Year December 31, 20X2 Revenue: Cost and Expenses: 0 Earnings before reorganization items and income taxes 0 Reorganization items: Interest earned on accumulated cash resulting from chapter 11 proceeding Total reorganization items 0 Income before income tax and discontinued operations 0 ncome tax Income before discontinued operations 0 Discontinued operations: Net income (loss) from discontinued operations 0 O A b. Prepare the statement of cash flows for the company for the year ending December 31, 20X2. (Amounts to be deducted should be indicated by minus sign.) HOBBES COMPANY (Debtor-in-Possession) Statement of Cash Flows For the Year December 31, 20X2 Cash Flows from Operating Activities: C Operating Cash Flows from Reorganization Activities Interest received on cash accumulated because of chapter 11 proceeding $ Operating Cash Flows from Discontinued Operations: C Cash Flows Provided by Investing Activities: Proceeds from sale of assets due to chapter 11 proceeding Net borrowings under short-term financing plan Principal payments on pre-petition debt authorized by court (bonds payable) Net cash provided by investing activities Cash at January 1, 20X2 Cash at December 31, 20X2 c. Prepare the balance sheet for the company as of December 31, 20X2. (Amounts to be deducted should be indicated by minus sign.) HOBBES COMPANY (Debtor-in-Possession) Balance Sheet December 31, 20X2 Assets Total current assets $ 0 Total assets 0 Liabilities Liabilities not subject to compromise Current liabilities (post-petition): Total liabilities not subject to compromise 0 Liabilities subject to compromise (pre-petition) Total liabilities subject to compromise 0 Total liabilities 0 Shareholders' Equity Total shareholders' equity 0 Total liabilities and shareholders' equity 0