Required information [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 $12. At the start of January 2021, VGC's income statement accounts had zero balances and its balance sheet account balances were as follows: Cash $ 1,940,000 Accounts Receivable Supplies Equipment Buildings Land Accounts Payable Deferred Revenue Notes Payable (due 2025) Common Stock Retained Earnings 183,000 17,200 953,000 498,000 1,940,000 111,000 157,000 152,000 2,700,000 2,411,200 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 $60,250 cash from customers on 1/1 for subscriptions that had already been earned and charged on account in 2020. b. Purchased 10 new computer servers for $41,800 on 1/2; paid $19,600 cash and signed a three-year note for the remainder owed. c. Paid $12,400 for an Internet advertisement run on 1/3. d. On January 4, purchased and received $5,500 of supplies on account. e. Received $200,000 cash on 1/5 from customers for service revenue earned in January. f. On January 6, paid $5,500 cash for supplies purchased on January 4. g. On January 7, sold 13,000 subscriptions at $12 each for services provided during January. Half was collected in cash and half was sold on account. h. Paid $330,000 in wages to employees on 1/30 for work done in January. i. On January 31, received an electric and gas utility bill for $6,250 for January utility services. The bill will be paid in February. Required: 1. Analyze the effect of the January transactions on the accounting equation, and indicate the account, amount, and direction of the effect of each transaction. (Enter any decreases to Assets, Liabilities, and Stockholder's Equity with a minus sign.) a. a. b. b. C. d. e. f. g. g. 95 h. i. Assets Liabilities + Stockholders' Equity 2. Prepare journal entries for the January transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 9 Record the $60,250 cash from customers on 1/1 for subscriptions that had already been earned and charged on account in 2020. Note: Enter debits before credits. Transaction a General Journal Debit Credit 7 View general journal Record entry Clear entry 3. Enter the beginning balances shown above in the following T-accounts and post the journal entries. Cash Accounts Receivable Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Supplies Equipment Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Debit Beginning Balance Ending Balance Buildings Ending Balance Land Credit Debit Credit Beginning Balance Ending Balance Accounts Payable Deferred Revenue Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Notes Payable (long-term) Common Stock Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Retained Earnings Service Revenue Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Debit Beginning Balance Ending Balance Salaries and Wages Expense Ending Balance Advertising Expense Credit Debit Credit Beginning Balance Ending Balance Debit Beginning Balance Utilities Expense Ending Balance Credit 4. Prepare an unadjusted trial balance as of January 31, 2021. VANISHING GAMES CORPORATION Unadjusted Trial Balance At January 31, 2021 Account Name 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 $ 60,250 $ 0 $ 60,250 5. Prepare an Income Statement for the month ended January 31, 2021, using unadjusted balances from part 4. VANISHING GAMES CORPORATION Income Statement At January 31, 2021 Revenues Total Revenues Expenses Total Expenses Net Income $ 0 0 6. Prepare a Statement of Retained Earnings for the month ended January 31, 2021, using the beginning balance given above and the net income from part 5. Assume VGC has no dividends, but include a line in the statement of retained earnings reporting Dividends of zero. VANISHING GAMES CORPORATION Statement of Retained Earnings Retained Earnings, January 1, 2021 Retained Earnings, January 31, 2021 7. Prepare a classified Balance Sheet at January 31, 2021, using your response to part 6. VANISHING GAMES CORPORATION Balance Sheet 8. Calculate net profit margin, expressed as a percent. (Round your answer to 1 decimal place.) Net Profit Margin %