Upon inspections of the records of Emerald Company, the following facts were discovered for the year ended December 31, 2019:

• a fire insurance premium of P40,000 was paid and charged as insurance expense for 2019. the fire insurance policy covers one year from April 1, 2019.
• Inventory on January 1, 2019 was understated by P80,000.
• Inventory on December 31, 2019 was understated by P120,000.
• Taxes of P60,000 for the 4th quarter of 2019 were paid on January 20, 2020 and charged as expense in 2020.
• On December 5, 2019, a cash advance of P100,000 by a customer was received for goods to be delivered in January, 2020.
• The amount of P100,000 was credited to sales. The gross profit on sales is 40%.
• The net income for the year ended December 31, 2019 before any adjustments is P1,550,000.

Required:

1. Prepare worksheet showing corrected net income for 2019.
2. Prepare adjusting entries on December 31, 2019.