Vanišhing Games Corporation (VGC) operates a massively multiplayer online game,
ID: 2337358 • Letter: V
Question
Vanišhing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $12. At the start of January 2018, VGC's income statement accounts had zero balances and sheet account balances were as follows Cash Accounts Receivable Supplies Equipment Buildings Land Accounts Payable Deferred Revenue Notes Payable (due 2025) Common Stock Retained Earnings $1,680,000 182,000 20,500 906,000 462,000 1,690,000 67,000 97,000 111,000 2,200,000 2,365,500 In addition to the above accounts, VGC's chart of accounts includes the following: Service Revenue, Salaries and Wages Expense, Advertising Expense, and Utilities Expense. The following transactions occurred during the January month a. Received $55,250 cash from customers on 1/1 for subscriptions that had already been earned in 2017 b. Purchased 10 new computer servers for $39,600 on 1/2; paid $11,000 cash and signed a three-year note for the remainder owed c Paid $18,700 for an Internet advertisement run on 1/3. d. On January 4, purchased and received $5,000 of supplies on account e. Received $185,000 cash on 1/5 from customers for service revenue earned in January Paid $5,000 cash to a supplier on January 6 g. On January 7, sold 13,200 subscriptions at $12 each for services provided during January. lf was collected in cash and half was sold on account. h Pald $315,000 in wages to employees on 1/30 for work done in January L On January 31, received an electric and gas utility bill for $5,980 for January utility services. The bill will be paid in FebruaryExplanation / Answer
Journal Entries :-
S.No.
General Journal
Debit
Credit
a
Cash
55250
A/c Receivable
55250
b
Equipment
39600
Cash
11000
Notes Payable
28600
c
Advertisement Exp
18700
Cash
18700
d
Supplies
5000
A/c Payable
5000
e
Cash
185000
Service Revenue
185000
f
A/c Payable
5000
Cash
5000
g
Cash
79200
A/c Receivable
79200
Service Revenue
158400
h
Salaries & Wages
315000
Cash
315000
i
Utility Exp
5980
Utility Exp Payable
5980
Ledger :-
Cash :-
Beg. Bal.
1680000
b
11000
a
55250
c
18700
e
185000
f
5000
g
79200
h
315000
End. Bal.
1649750
A/c Receivable :-
Beg. Bal.
182000
a
55250
g
79200
End. Bal.
205950
Equipment :-
Beg. Bal.
906000
b
39600
End. Bal.
945600
Notes Payable :-
Beg. Bal.
111000
b
28600
End. Bal.
139600
Supplies:-
Beg. Bal.
20500
d
5000
End. Bal.
25500
A/c Payable :-
Beg. Bal.
167000
f
5000
d
5000
End. Bal.
167000
Utility Exp Payable :-
Beg. Bal.
0
i
5980
End. Bal.
5980
Income Statement :-
Service revenue
343400
(-) Advertisement Exp
18700
(-) Salaries & Wages
315000
(-) Utility Exp
5980
Net Income
3720
Balance Sheet :-
Assets
Current Assets
Cash
1649750
A/c Receivable
205950
Supplies
25500
Non Current Assets
Equipment
945600
Building
462000
Land
1690000
Total Assets
4978800
Liabilities
Current Liabilities
A/c Payable
167000
Utility Exp Payable
5980
Long Term Liabilities
Notes Payable
139600
Deffered Revenue
97000
Owners Equity
Common Stock
2200000
Retained Earnings (2365500 + 3720)
2369220
Total Liab & Owners Equity
4978800
S.No.
General Journal
Debit
Credit
a
Cash
55250
A/c Receivable
55250
b
Equipment
39600
Cash
11000
Notes Payable
28600
c
Advertisement Exp
18700
Cash
18700
d
Supplies
5000
A/c Payable
5000
e
Cash
185000
Service Revenue
185000
f
A/c Payable
5000
Cash
5000
g
Cash
79200
A/c Receivable
79200
Service Revenue
158400
h
Salaries & Wages
315000
Cash
315000
i
Utility Exp
5980
Utility Exp Payable
5980
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.