STU Ltd. has the following information before year-end adjustments:

Item	Amount ($)
Accounts Receivable	100,000
Allowance for Doubtful Accounts	5,000
Estimated Bad Debts Expense	2,000
Prepaid Expenses	10,000
Unearned Revenue	15,000
Depreciation Expense	20,000

Requirements:

1. Adjust Accounts Receivable for estimated bad debts.
2. Record the adjustment for Prepaid Expenses.
3. Adjust Unearned Revenue to recognize earned revenue.
4. Update Depreciation Expense if additional assets worth $50,000 are purchased mid-year.
5. Discuss the effect of these adjustments on the financial statements.