Use the following information in answering questions 1 and 2: Hal Company filed for protection from creditors under Chapter 11 of the bankruptcy act on July 1, 2016. Hal had the folowing liabilities at the time of filing: 10% mortgage bonds payable, secured by a building $200,000 with a book value and fair value of $100,000 Accrued interest on mortgage (January 1-July 1) 10,000 Accounts payable 80,000 Priority tax claims 50,000 $340,000 1. The December 31, 2016, balance sheet will show prepetition liabilities of: a $340,000 (the claims at filing) $240,000 (the original claims less the secured portion of the mortgage bonds) $350,000 (the original claims plus six months' interest on the bonds) d $290,000 (the original claims less the priority tax claims) 2. Two-and-a-half years after filing the petition for bankruptcy, Hal's management, its creditors, the equity holders, and other parties in interest agree on a reorganization value of $500,000. Which of the following statements is most likely? a The reorganization value approximates the appraised value of the firm as a going concern less the prepetition liabilities. b The reorganization value approximates the fair value of the assets less the fair value of the prepetition and postpetition liabilities. The reorganization value approximates the fair value of the assets less the book value of the postpetition Nabilities and the estimated settlement value of the prepetition liabilities. The reorganization value approximates the fair value of the entity without considering the liabilities. Use the following information in answering questions 1 and 2: Hal Company filed for protection from creditors under Chapter 11 of the bankruptcy act on July 1, 2016. Hal had the folowing liabilities at the time of filing: 10% mortgage bonds payable, secured by a building $200,000 with a book value and fair value of $100,000 Accrued interest on mortgage (January 1-July 1) 10,000 Accounts payable 80,000 Priority tax claims 50,000 $340,000 1. The December 31, 2016, balance sheet will show prepetition liabilities of: a $340,000 (the claims at filing) $240,000 (the original claims less the secured portion of the mortgage bonds) $350,000 (the original claims plus six months' interest on the bonds) d $290,000 (the original claims less the priority tax claims) 2. Two-and-a-half years after filing the petition for bankruptcy, Hal's management, its creditors, the equity holders, and other parties in interest agree on a reorganization value of $500,000. Which of the following statements is most likely? a The reorganization value approximates the appraised value of the firm as a going concern less the prepetition liabilities. b The reorganization value approximates the fair value of the assets less the fair value of the prepetition and postpetition liabilities. The reorganization value approximates the fair value of the assets less the book value of the postpetition Nabilities and the estimated settlement value of the prepetition liabilities. The reorganization value approximates the fair value of the entity without considering the liabilities