138.Under the accrual basis, some accounts in the ledger require updating at the end of the period. Discuss the threemain reasons for this updating and give an example of each.
139.Explain the differences between
(a)Accrued revenues and unearned revenues.
(b)Accrued expenses and prepaid expenses.
(c)Give an example of each.
140.For each of the following, journalize the necessary adjusting entry:
(a)A business pays weekly salaries of $22,000 on Friday for a five-day week ending onthat day. Journalize the necessary adjusting entry at the end of the fiscal period,assuming that the fiscal period ends (1) on Tuesday, (2) on Wednesday.
(b)The balance in the prepaid insurance account before adjustment at the end of the yearis $18,000. Journalize the adjusting entry required under each of the followingalternatives: (1) the amount of insurance expired during the year is $5,300, (2) theamount of unexpired insurance applicable to a future period is $2,700.
(c)On July 1 of the current year, a business pays $54,000 to the city for license taxes forthe coming fiscal year. The same business is also required to pay an annual propertytax at the end of the year. The estimated amount of the current year's property taxallocated to July is $4,800. (1) Journalize the two adjusting entries required to bring theaccounts affected by the taxes up to date as of July 31. (2) What is the amount of taxexpense for July?
(d)The estimated depreciation on equipment for the year is $32,000.