Smith Corporation has gone through bankruptcy and is ready to emerge as a reorganized entity on December 31, 2017. On this date, the company has the following assets (fair value is based on discounting the anticipated future cash flows):

	Book Value		Fair Value
Accounts receivable	$	21,100	$	19,100
Inventory		157,000		125,000
Land and buildings		271,000		299,000
Machinery		159,000		136,000
Patents		107,000		132,000

The company has a reorganization value of $828,000.

Smith has 52,300 shares of $10 par value common stock outstanding. A deficit Retained Earnings balance of $697,000 also is reported. The owners will distribute 35,400 shares of this stock as part of the reorganization plan.

The companys liabilities will be settled as follows:

• Accounts payable of $196,000 (existing at the date on which the order for relief was granted) will be settled with an 8 percent, two-year note for $36,000.
• Accounts payable of $100,000 (incurred since the date on which the order for relief was granted) will be paid in the regular course of business.
• Note payableFirst Metropolitan Bank of $215,000 will be settled with an 8 percent, five-year note for $50,500 and 17,700 shares of the stock contributed by the owners.
• Note payableNorthwestern Bank of Tulsa of $353,000 will be settled with a 7 percent, eight-year note for $103,000 and 17,700 shares of the stock contributed by the owners.

b. Prepare a balance sheet for Smith Corporation upon its emergence from reorganization.