Case 1:

The following information relates to Chaters Advertising Services for the accounting period ending December 31, 2018. The company is a leader within your local advertising industry but their accountant resigned just days before the final year end and only the information now presented was made available. The owners have decided to test your groups knowledge in accounting having been made aware that you are currently pursuing a course in accounting at the university level. In this regard your group has been approached to use the information presented alongside your knowledge to advise and present the company financial statements for the period.

Charters Advertising Service

Trial Balance

December 18, 2018

Account Name	DR		CR
	25,500
Cash	3,100
Accounts Receivable	2,300
Supplies	2,600
Equipment
Accumulated Depreciation - Equipment
Furniture	6,000
Accumulated Depreciation - Furniture
Accounts Payable			4,000
Salary Payable
Unearned Service Revenue
Charters Capital			40,000
Charters Withdrawal
Service Revenue			4,200
Rent Expense	3,600
Utilities Expense4	1,700
Salaries Expense	3,400
Depreciation Expense - Equipment
Depreciation Expense - Furniture
Supplies Expense
Total	48,200		48,200

Later in December, the business completed these transactions, as follows:

Dec. 21 Received $2,500 in advance for advertising service expected to be performed in January 2019.

Dec 21 Paid secretary $500 for the week December 17 to 21.

Dec. 26 Paid $1,000 on account.

Dec 28 Collected $1,200 on account.

Dec 30 Charter withdrew cash of $2,000 for personal use.

Requirements

1. Journalize the transactions of December 21 30 and post to the respective T-accounts and key all items by date. Write a brief narration for each journal entry.
2. At December 31, the business gathers the following information for the adjusting journal entries:

1. Accrued service revenue, $600
2. Earned $700 of the service revenue collected in advance on December 21 because of a change in the agreement between client and the company to split the advertising campaign to December 2018 and the remaining balance of $1,800 for January 2019.
3. Supplies on hand, $1,300.
4. Depreciation expense equipment $260: furniture $600.
5. Accrued $500 expense for secretarys salary December 24 to 28.

3. After journalizing the transactions in requirement 2, post them to their respective T-accounts. Write a brief narration for each journal entry.
4. Prepare the income statement and the statement of owners equity of Charter Advertising Services for the month ended December 31, 2018 and prepare the balance sheet at that date.