C3-1 Analyzing, Recording, and Posting, and Preparing and Evaluating Financial Statements (Chapters 1-3) [LO 3-2, LO 3-3, LO 3-4, LO 3-5]
[The following information applies to the questions displayed below.]
| Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $10. At the start of January 2015, VGCs income statement accounts had zero balances and its balance sheet account balances were as follows: |
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| Cash | $ | 1,810,000 | |
| Accounts Receivable | | 224,000 | |
| Supplies | | 23,400 | |
| Equipment | | 916,000 | |
| Land | | 1,950,000 | |
| Building | | 446,000 | |
| Accounts Payable | | 120,000 | |
| Unearned Revenue | | 91,000 | |
| Notes Payable (due 2018) | | 159,000 | |
| Common Stock | | 2,600,000 | |
| Retained Earnings | | 2,399,400 | |
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| In addition to the above accounts, VGCs chart of accounts includes the following: Service Revenue, Salaries and Wages Expense, Advertising Expense, and Utilities Expense. | 4. | Prepare an unadjusted trial balance as of January 31, 2015. | |
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| | | VANISHING GAMES CORPORATION | | Unadjusted Trial Balance | | At January 31, 2015 | | Account Name | Debit | Credit | | Cash | | | | Accounts Receivable | | | | Supplies | | | | Equipment | | | | Buildings | | | | Land | | | | Accounts Payable | | | | Unearned Revenue | | | | Notes Payable (long-term) | | | | Common Stock | | | | Retained Earnings | | | | Service Revenue | | | | Salaries and Wages Expense | | | | Advertising Expense | | | | Utilities Expense | | | | Total | | 5. | Prepare an Income Statement for the month ended January 31, 2015, using unadjusted balances from part 4. | | | | | VANISHING GAMES CORPORATION | | Income Statement | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6. | Prepare a Statement of Retained Earnings for the month ended January 31, 2015, using the beginning balance given above and the net income from part 5. Assume VGC has no dividends. | | | | | VANISHING GAMES CORPORATION | | Statement of Retained Earnings | | For the Month Ended January 31, 2015 | | Retained Earnings, January 1, 2015 | | | | | | | | | Retained Earnings, January 31, 2015 | | | | |
| 7. | Prepare a classified Balance Sheet at January 31, 2015, using your response to part 6. |
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| | | VANISHING GAMES CORPORATION | | Balance Sheet | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 8. | Calculate net profit margin, expressed as a percent. (Round your answer to 1 decimal place.) |
