Question
Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $15. At the start of January 2021, VGCs income
Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $15. At the start of January 2021, VGCs income statement accounts had zero balances and its balance sheet account balances were as follows:
Cash | $ 2,220,000 |
---|---|
Accounts Receivable | 225,000 |
Supplies | 20,600 |
Equipment | 919,000 |
Buildings | 479,000 |
Land | 1,770,000 |
Accounts Payable | 117,000 |
Deferred Revenue | 109,000 |
Notes Payable (due 2025) | 132,000 |
Common Stock | 2,500,000 |
Retained Earnings | 2,775,600 |
In addition to the above accounts, VGCs chart of accounts includes the following: Service Revenue, Salaries and Wages Expense, Advertising Expense, and Utilities Expense. The January transactions are shown below:
- Received $51,250 cash from customers on 1/1 for subscriptions that had already been earned and charged on account in 2020.
- Purchased 10 new computer servers for $38,800 on 1/2; paid $18,000 cash and signed a three-year note for the remainder owed.
- Paid $18,400 for an Internet advertisement run on 1/3.
- On January 4, purchased and received $3,800 of supplies on account.
- Received $200,000 cash on 1/5 from customers for service revenue earned in January.
- On January 6, paid $3,800 cash for supplies purchased on January 4.
- On January 7, sold 10,300 subscriptions at $15 each for services provided during January. Half was collected in cash and half was sold on account.
- Paid $320,000 in wages to employees on 1/30 for work done in January.
- On January 31, received an electric and gas utility bill for $6,070 for January utility services. The bill will be paid in February.
Requirements:
General Journal tab - Prepare the journal entries to record the transactions (a) through (i). Review the accounts as shown in the General Ledger and Trial Balance tabs.
General Ledger tab - Each journal entry is posted automatically to the general ledger.
Trial Balance tab - The ending balance values from the General Ledger tab flows through to the Trial Balance tab.
Income Statement tab - Use the drop-down to select the accounts properly included on the income statement.
Statement of Retained Earnings tab - Prepare the statement of retained earnings for the month ended January 31, 2021. If there are no dividends, include a line that reports Dividends of zero.
Balance Sheet tab - Prepare a classified Balance Sheet at January 31, 2021.
Analysis tab - Calculate net profit margin, expressed as a percent.
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