ke th ot er id ne is ne At n NAME: SECTION: Problem #5 Preparing Adjusting Entries at Year-End SCORE: PROFESSOR: The following information relating to the accounts of the Leopoldo Valdez Car Service Center is available prior to the Jan. 31, 2010 year-end: a. Valdez paid P24,900 to the Prudential Guarantee and Assurance Company, Inc. on December 1, 2009 for insurance to cover the months of December 2009 to May 2010 inclusive. Use the asset method. b. The ledger account Supplies showed a P43,500 debit balance. A count of supplies on Jan. 31 amounted to P9,800. c. Valdez received a P27,000 payment from the City Government of Batangas for servicing police vehicles for a nine-month period commencing on Nov. 1, 2009. The payment is reflected in the Unearned Revenues account. d. The Car Service Equipment account showed a P252,000 balance at year-end, representing the acquisition cost of the equipment on Aug. 1, 2009. The equipment is estimated to have a five-year life. e. Assume that the last day of January 2010 fell on a Thursday and that Valdez's employees are paid P25,000 every Friday (for a 5-day workweek). Required: Prepare the adjusting entries. 5-27