Bryant Corporation was incorporated on December 1, 2012, and began operations one week later. Before closing the books for the fiscal year ended November 30, 2013, Bryant's controller prepared the following financial statements:

Income Statement
For Year Ended November 30, 2013
Net sales ..................................$2,950,000
Operating expenses:
Cost of goods sold ......................$1,670,000
Selling and administrative ..................650,000
Depreciation ...................................40,000
Research and development cost ............30,000
Total expenses ...........................$2,390,000
Income before income taxes ............$ 560,000
Income tax expense ........................168,000
Net income ................................$ 392,000
Bryant is in the process of negotiating a loan for expansion purposes, and the bank has requested audited financial statements. During the course of the audit, the following additional information was obtained:
a. Included in selling and administrative expenses were $5,000 of costs incurred on software being developed for sale to others. The technological feasibility of the software has been established.
b. Based on an aging of the accounts receivable as of November 30, 2013, it was estimated that $36,000 of the receivables will be uncollectible.
c. Inventories at November 30, 2013, did not include work in process inventory costing $12,000 sent to an outside processor on November 26, 2013.
d. A $3,000 insurance premium paid on November 30, 2013, on a policy expiring one year later was charged to insurance expense.
e. On June 1, 2013, a production machine purchased for $24,000 was charged to repairs and maintenance. For financial and tax purposes, Bryant depreciates machines of this type using the straight-line method over a 5-year life with no salvage value.
f. R&D costs of $150,000 were incurred in the development of a patent that Bryant expects to be granted during the fiscal year ending November 30, 2014. Bryant initiated a 5-year amortization of the $150,000 total cost during the fiscal year ended November 30, 2013.
g. During December 2013, a competitor company filed suit against Bryant for patent infringement, claiming $200,000 in damages. Bryant's legal counsel believes that an unfavorable outcome is probable. A reasonable accrual based on an estimate of the court's award to the plaintiff is $50,000.
h. The 30% effective tax rate was determined to be appropriate for calculating the provision for income taxes for the fiscal year ended November 30, 2013. Ignore computation of the deferred portion of income taxes.
Required:
1. Prepare the necessary correcting entries.
2. Prepare a corrected balance sheet for Bryant as of November 30, 2013, and a corrected income statement for the year ended November 30, 2013.

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Balance Sheet November 30, 2013 Assets Liabilities and Shareholders' Equi Current Liabilities Current Assets Cash Accounts receivable Less: Allowance for doubtful accounts Inventories Prepaid insurance $ 180,000 480,000 (59,000) Accounts payable and accrued expenses 592,000 168,000 S 760,000 Income taxes payable Total current liabilities 430,000 Shareholders' Equity $ 400,000 392,000 15,000 $1,046,000 426,000 (40,000) 120,000 $1,552,000 Common stock, $10 par value Retained eamings Total current assets Property, plant, and equipment Less: Accumulated depreciation R&D costs Total Assets Total shareholders' equity Total Liabilities and Shareholders' Equity