E3-21 Comprehensive Exercise [LO2, LO3, LO4, LO5] Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $14. At the start of 2010, VGC's income statement accounts had zero balances and its balance sheet account balances were as follows: Cash $ 1,513,000 Accounts Receivable 157,000 Supplies 15,900 Equipment 892,500 Land 1,202,000 Building 423,300 Accounts Payable 106,400 Unearned Revenue 179,800 Notes Payable (due 2013) 58,800 Contributed Capital 2,440,000 Retained Earnings 1,418,700 -------------------------------------------------------------------------------- In addition to the above accounts, VGC's chart of accounts includes the following: Subscription Revenue, Licensing Revenue, Wages Expense, Advertising Expense, and Utilities Expense. rev: 03-02-2011 references Section Break E3-21 Comprehensive Exercise [LO2, LO3, LO4, LO5] 1.value: 3 points E3-21 Requirement 1 Requirement 1: Analyze the effect of the January 2010 transactions (shown below) on the accounting equation and effect (+ for increase and - for decrease) of each transaction. (Leave no cells blank; if no effect, select "NE".) a. Received $51,000 cash from customers for subscriptions that had already been earned in 2009. b. Received $25,800 cash from Electronic Arts, Inc., for licensing revenue earned in the month of January 2010. c. Purchased 10 new computer servers for $34,700; paid $10,300 cash and signed a three year note for the remainder owed. d. Paid $10,800 for an Internet advertisement run on Yahoo! in January 2010. e. Sold 15,200 monthly subscriptions at $14 each for services provided during the month of January 2010. Half was collected in cash and half was sold on account. f. Received an electric and gas utility bill for $5,370 for January 2010 utility services. The bill will be paid in February. g. Paid $378,200 in wages to employees for work done in January 2010. h. Purchased $3,120 of supplies on account. i. Paid $3,120 cash to the supplier in (h). Requirement 2: Prepare journal entries for the January 2010 transactions listed in requirement 1. (Omit the "$" sign in your response.) 3.Create T-accounts, enter the beginning balances shown above, post the journal entries to the T-accounts, and show the unadjusted ending balances in the T-accounts