Smith Corporation has gone through bankruptcy and is ready to emerge as a reorganized entity on...

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Smith Corporation has gone through bankruptcy and is ready to emerge as a reorganized entity on December 31, 2024. On this date, the company has the following assets (fair value is based on discounting the anticipated future cash flows): Accounts receivable Inventory Land and buildings Machinery Patents Net Book Value Fair Value $ 21,400 $ 19,400 142,000 266,000 138,100 101,000 110,000 294,000 115,100 126,000 The company has a reorganization value of $836,000. Smith has 50,900 shares of $10 par value common stock outstanding. A deficit Retained Earnings balance of $692,000 also is reported. The owners will distribute 33,400 shares of this stock as part of the reorganization plan. The company's liabilities will be settled as follows: NO Accounts payable of $188,000 (existing at the date on which the order for relief was granted) will be settled with an 8 percent, two- year note for $35,200. Accounts payable of $99,500 (incurred since the date on which the order for relief was granted) will be paid in the regular course of business. Note payable-First Metropolitan Bank of $204,000 will be settled with an 8 percent, five-year note for $50,400 and 16,700 shares of the stock contributed by the owners. Note payable-Northwestern Bank of Tulsa of $360,000 will be settled with a 7 percent, eight-year note for $122,000 and 16,700 shares of the stock contributed by the owners. Required: b. Prepare a balance sheet for Smith Corporation upon its emergence from reorganization. ASSETS Current Assets: SMITH CORPORATION Balance Sheet December 31, 2024 Smith Corporation has gone through bankruptcy and is ready to emerge as a reorganized entity on December 31, 2024. On this date, the company has the following assets (fair value is based on discounting the anticipated future cash flows): Accounts receivable Inventory Land and buildings Machinery Patents Net Book Value Fair Value $ 21,400 $ 19,400 142,000 266,000 138,100 101,000 110,000 294,000 115,100 126,000 The company has a reorganization value of $836,000. Smith has 50,900 shares of $10 par value common stock outstanding. A deficit Retained Earnings balance of $692,000 also is reported. The owners will distribute 33,400 shares of this stock as part of the reorganization plan. The company's liabilities will be settled as follows: NO Accounts payable of $188,000 (existing at the date on which the order for relief was granted) will be settled with an 8 percent, two- year note for $35,200. Accounts payable of $99,500 (incurred since the date on which the order for relief was granted) will be paid in the regular course of business. Note payable-First Metropolitan Bank of $204,000 will be settled with an 8 percent, five-year note for $50,400 and 16,700 shares of the stock contributed by the owners. Note payable-Northwestern Bank of Tulsa of $360,000 will be settled with a 7 percent, eight-year note for $122,000 and 16,700 shares of the stock contributed by the owners. Required: b. Prepare a balance sheet for Smith Corporation upon its emergence from reorganization. ASSETS Current Assets: SMITH CORPORATION Balance Sheet December 31, 2024

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SMITH CORPORATION ASSETS Balance Sheet December 31 2024 Current Assets Accounts receivab... View the full answer