Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $15. the start of January 2021, 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 $ 1,830,000 242,000 23,100 969,000 451,000 1,970,000 199,000 112,000 Deferred Revenue Notes Payable (due 2025) Common Stock Retained Earnings 141,000 2,100,000 2,933,100 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. ces The January transactions are shown below. a. Received $63,000 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 $36,000 on 1/2; paid $19,300 cash and signed a three-year note for the remainder owed. c. Paid $19,300 for an Internet advertisement that ran today on 1/3. d. On January 4, purchased and received $5,450 of supplies on account. e. Received $230,000 cash on 1/5 from customers for service revenue earned but not previously recorded in January. f. On January 6, paid $5,450 cash for supplies purchased on January 4. g. On January 7, sold 13,400 subscriptions at $15 each for services provided during January. Half was collected in cash and half was sold on account. h. Paid $400,000 in wages to employees on 1/30 for work done in January. 1. On January 31, received an electric and gas utility bill for $6,100 for January utility services. The bill will be paid in February. Requirement General Journal General Ledger Trial Balance Income Statement Stmt of Retained Earnings Balance Sheet Analysis Use the dropdowns to select the accounts properly included on the classified balance shee You will need to determine and enter the balance of the Common Stock and Retained Earnings accounts in the Stockholden Equity section. VANISHING GAMES CORPORATION Balance Sheet At January 31, 2021 $ 0 0 0 0 0 0
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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