Required information 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 $11. At the start of January 2018, VGC's income statement accounts had zero balances and its balance 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 $1,620,000 236,000 15, 700 909, 000 441,000 1,830, 000 203,000 150,000 97,000 2,300,000 2, 301, 700 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 $55,750 cash from customers on 1/1 for subscriptions that had already been earned in 2017. b. Purchased 10 new computer servers for $35,400 on 1/2; paid $14,300 cash and signed a three-year note for the remainder owed. c. Paid $11,000 for an Internet advertisement run on 1/3. d. On January 4, purchased and received $3,600 of supplies on account. e. Received $240,000 cash on 1/5 from customers for service revenue earned in January. f. Paid $3,600 cash to a supplier on January 6. g. On January 7, sold 11,200 subscriptions at $11 each for services provided during January. Half was collected in cash and half was sold on account. h. Paid $340,000 in wages to employees on 1/30 for work done in January. i. On January 31, received an electric and gas utility bill for $5,570 for January utility services. The bill will be paid in February. C3-1 Part 3 3. Enter the beginning balances shown above in the following T-accounts and post the journal entries. Cash Beg. Bal End. Bal Accounts Receivable Beg. Ball End. Bal Supplies Equipment Beg. Bal Beg. Bal End. Bal End. Bal Buildings Land Beg. Bal Beg. Bal End. Bal End. Bal Accounts Payable Deferred Revenue Beg. Bal Beg. Bal End. Bal End. Bal Notes Payable (long-term) Common Stock Beg. Bal Beg. Bal End. Bal End. Bal Retained Earnings Service Revenue Beg. Bal Beg. Bal End. Bal End. Bal Salaries and Wages Expense Advertising Expense Beg. Bal Beg. Ball End. Bal Utilities Expense Beg. Bal End. Bal End. Bal C3-1 Part 4 4. Prepare an unadjusted trial balance as of January 31, 2018. Account Name VANISHING GAMES CORPORATION Unadjusted Trial Balance Cash Accounts Receivable Supplies Equipment Buildings Land Accounts Payable Deferred Revenue Notes Payable (long-term) Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Advertising Expense Utilities Expense Total Debit Credit $ 0 $ 0 C3-1 Part 5 5. Prepare an Income Statement for the month ended January 31, 2018, using unadjusted balances from part 4. VANISHING GAMES CORPORATION Income Statement $ 0 0 C3-1 Part 6 6. Prepare a Statement of Retained Earnings for the month ended January 31, 2018, 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 Retained Earnings, January 1, 2018 Retained Earnings, January 31, 2018 $ 0 7. Prepare a classified Balance Sheet at January 31, 2018, using your response to part 6. VANISHING GAMES CORPORATION Balance Sheet 0 0 0 0 C3-1 Part 8 8. Calculate net profit margin, expressed as a percent. (Round your answer to 1 decimal place.) Net Profit Margin %