A Company in Reorganization Shows the Following Balance Sheet The Company's Reorganization Value Is $3,000

A company in reorganization shows the following balance sheet:
$$\begin{array} { | l | l | l | r | } \hline \text { Assets } & \$ 5,000 & \text { Postpetition liabilities } & \$ 400 \\\hline & & \text { Prepetition fully secured liabilities } & 1,000 \\\hline & & \text { Liabilities subject to compromise } & 4,000 \\\hline & & \text { Common stock } & 200 \\\hline & & \text { Retained earnings [deficit\} } & \{ 600 \} \\\hline \text { Total } & \$ 5,000 & \text { Total } & \$ 5,000 \\\hline\end{array}$$ The company's reorganization value is $3,000. Liabilities subject to compromise are to be settled by issuing, to the creditors, long-term debt of $1,550 and 60% of the new voting common stock. The remaining common stock will go to the existing shareholders.
Required
a. Show why this reorganization qualifies for fresh start reporting.
b. Present the balance sheet of the company following emergence from reorganization, assuming the plan is implemented as described above.