QUESTION 15 Ref. Ne Clarification - Flash Enterprises Continuing Fact Pattern: You have numerous Flash Enterprises problems that will show up in a random order throughout the exam. Each Flash question is a small selection from a large comprehensive problem. Treat each Flash Enterprise question as stand alone, meaning you should ignore the scenarios that are not mentioned and include in your answer only the specific scenarios requested. Facts: Flash Enterprises provides you with the below unadjusted account balances as of 12/31/2019, all of which are normal: Account Description Ref. No Account Description 1 S26,045 17 Note Payable S65,000 2 Accounts Receivable 16,000 18 Contributed Capital 50,000 3 Employee Note Receivable 7.000 19 Retained Earnings 12.000 4 Supplies 2.400 20 Dividends 32.000 s Prepaid Advertising Expense 17,600 21 Service Fee Revenue 240,000 6 Prepaid Insurance Expense 9,745 22 Gain on asset disposal 5,115 7 Vehicle SS.CO 23 Advertising Expense 34.000 8 Equipment 125,000 Depreciation Expense 0 9 Accumulated Depreciation 82,995 25 Insurance Expense 2.240 10 Accounts Payable-Gordon Industries 4,400 26 Interest Income 135 Dividend Payable 9,000 27 Interest Expense o 12 Interest Payable 0 28 Miscellaneous Expense 965 13 New Customer Advance 9.000 29 Rent Expense 28,500 14 Rent Payable 0 30 Salaries Expense 92.000 15 Salaries Payable 0 31 Supplies Expense 24,000 16 Utilities Payable 32 Utilities Expense 4,950 Short Cut using the above unadjusted account balances, Flash has net income for the twelve months ended at 12/31/2019 of $58,595. Please consider the following 4 scenarios: (1) On January 2, 2020, Flash prepared and mailed invoices to customers for $11,000 of services rendered on account in December 2019. This is the first invoice Flash has prepared for the December services as such no customer payments have yet been received and no entries have yet been made related to these services. (2) Regarding $9,745 of advance payments for insurance coverage: () $7,785 was paid in late 2018 for an 18-month general business Insurance policy effective January 1, 2019 and (i) $1,960 was paid in August 2019 for a seven-month automobile insurance policy effective Sept. 1, 2019. (3) On January 2, 2020 Flash paid the company's landlord, LMN Rentals $3,000 for the December rent. (4) On January 7, 2020 Flash received the December 2019 utility bill in the mail and immediately wrote and mailed a $600 check to the utility company representing payment in full. Required in class we classified adjusting journal entries in to categories or types. Consider the adjusting entries resulting from the 4 scenarios listed above and select the answer below that shows the number of entries that would be considered an accrual type entry i.e. either an accrued revenue and/or an accrued expense). O A. 2 1 O 0.4 OD.3 OEO
