Smith Corporation has gone through bankruptcy and is ready to emerge as a reorganized entity on December 31, 2020. 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	$	20,900	$	18,900
Inventory		151,000		119,000
Land and buildings		269,000		297,000
Machinery		154,300		131,300
Patents		101,000		126,000

The company has a reorganization value of $859,000.

Smith has 52,100 shares of $10 par value common stock outstanding. A deficit Retained Earnings balance of $681,000 also is reported. The owners will distribute 32,200 shares of this stock as part of the reorganization plan.

The companys liabilities will be settled as follows:

Accounts payable of $203,000 (existing at the date on which the order for relief was granted) will be settled with an 8 percent, two-year note for $35,400.

Accounts payable of $97,200 (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 $203,000 will be settled with an 8 percent, five-year note for $51,300 and 16,100 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 $126,000 and 16,100 shares of the stock contributed by the owners.

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