Reference no: EM132789596

The following information pertains to Luz Un Machine Shop:

a. Accrued interest on a note receivable amounted to P1,000.

b. A one-year insurance policy was purchased for P20,000. Three months have passed since the purchase.

C. Depreciation on buildings is at P50,000.

d. The company received a P36,000 advance payment during the year on service on services still to be performed. By the end of the year, one-fourth of the services had been performed.

e. The company's Supplies account showed a beginning debit balance of P2,000 supplies purchased of P8,000; P3,000 of supplies were on hand at year-end at year-end.

Problem 1: The adjusting entry for Supplies would include a

a. credit to Supplies for P3,000.

b. credit to Supplies Expense for P8,000.

C. debit to Supplies Expense for P7,000.

d. debit to Supplies Expense for P8,000.

Problem 2: The adjusting entry for depreciation on buildings would include a

a. credit to Accumulated Depreciation-Buildings for P50,000.

b. credit to Buildings for P50,000.

C. credit to Depreciation Expense-Buildings for P50,000.

d. debit to Accumulated Depreciation-Buildings for P50,000.

Problem 3: The adjusting entry for the insurance policy would include a

a. credit to Insurance Expense for P15,000.

b. credit to Prepaid Insurance for P5,000.

C. debit to Insurance Expense for P15,000.

d. debit to Prepaid Insurance for P5,000.

Problem 4: The adjusting entry to record the accrued interest on the note would include a

a. credit to Interest Income for P1,000.

b. credit to Interest Receivable for P1,000.

C. debit to Interest Expense for P1,000.

d. debit to Interest Payable for P1,000.

Problem 5:  The adjusting entry to record the amount of service revenues earned during the period would include a

a. credit to Unearned Service Revenues for P9,000.

b. debit to Service Revenues for P27,000.

C. debit to Unearned Service Revenues for P9,000.

d. debit to Unearned Service Revenues for P27,000.