Problem #4: Adjusting Entries and Accounting Policy The following are some of the transactions made by Timoleon Lianza Cleaners during 2011 Apr. 1 Acquired cleaning supplies in the amount of P260,000. A count of the supplies on Dec 31, 2011 amounted to P110,000. Aug. 1 Received P360,000 from Cebu Company for cleaning janitorial uniforms over the next 3 years. Nov. 1 Paid P240,000 for annual rent. Required: 1. Assume that Lianza records these transactions using the following accounts, record the adjusting entries on Dec 31, 2011: (1) Office Supplies. (2) Prepaid Rent, (3) Unearned Cleaning Revenues 2. Now, assume that Lianza records these transactions using the following accounts, what will be the adjusting entries on Dec 31, 2011? (1) Office Supplies Expense, (2) Rent Expense, (3) Cleaning Revenues 3. If Lianza were to use reversing entries, which set of entries, (1) or (2), would have to be reversed? Why