For each of the following findings, indicate the income statement and balance sheet accounts that are affected and whether these accounts are over- or understated, and provide an adjusting entry to correct the misstatement if required. Assume a December 31 year-end.

a. Outstanding cheques totalling $44,000 were deducted from the cash balance on December 23 but deliberately not mailed out to avoid a bank overdraft over the holidays. The cheques were in payment of various raw material supplier accounts.

b. Sales of $79,000 were recorded on goods that were shipped after year-end and included in the year-end inventory count. The cost of these goods is $53,000.

c. A lawyers bill for services rendered in November was not paid or accrued

d. The allowance for bad debts has a credit balance of $80,000. The accounts receivable balance is $150,000, and a reasonable estimate is that all but $10,000 of this will be collected

e. As of December 31, the company has recognized $250,000 of revenue on a $750,000 contract to construct a bridge. The construction work has not yet started, but $40,000 of building materials for the job was received and expensed as contract costs. At this point, the company has not been able to estimate the total costs of construction.