JOURNAL ENTRIES - DEC 31, 2004

No allowance had been set up for estimated uncollectible receivables. The company decided to set up such an allowance for the estimated probable losses as of December 31, 2003, for 2003 accounts of P350 and for 2004 accounts of P750. It was also decided to correct the charge against each year so that it shows the losses (actual and estimated) relating to that year's sales. Accounts have been written off to bad debts expenses as follows:

--------------------In 2003---In 2004

2003 accounts P 200 ----P 1,000

2004 accounts -----------------800