Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $14. 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 Equipnent Buildings $1,730, e00 188, 000 15, 200 921, e00 S08,000 1,798, e00 153, e0e 163,000 124, 000 2,900,000 1,812, 200 Land Accounts Payable Deferred Revenue Notes Payable (due 2825) Connon Stock Retained tarnings In addition to the above accounts, VGC's chart of accounts includes the following: Service Revenue, Salarles and Wages Expense. Advertising Expense, and Utilities Expense. The following transactions occurred during the January month: a. Recelved $66.750 cash from customers on 1/1 for subscriptions that had already been earned in 2017. b. Purchased 10 new computer servers for $36,400 on 1/2: paid $15,700 cash and signed a three-year note for the remalnder owed. c. Paid $1,700 for an Internet advertisement run on 1/3. d. On January 4. purchased and recelved $5,400 of supplies on account. e. Recelved $210,000 cash on 1/5 from customers for service revenue earned In January. f. Pald $5.400 cash to a supplier on January 6. g. On January 7, sold 1.700 subscriptions at $14 each for services provided during January. Half was collected In cash and half was sold on account. h. Paid $350,000 in wages to employees on 1/30 for work done in January. 1. On January 31, recelved an electric and gas utility bill for $6.210 for January utility services. The bill wll be pald in February.
Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $14. 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 Equipnent Buildings $1,730, e00 188, 000 15, 200 921, e00 S08,000 1,798, e00 153, e0e 163,000 124, 000 2,900,000 1,812, 200 Land Accounts Payable Deferred Revenue Notes Payable (due 2825) Connon Stock Retained tarnings In addition to the above accounts, VGC's chart of accounts includes the following: Service Revenue, Salarles and Wages Expense. Advertising Expense, and Utilities Expense. The following transactions occurred during the January month: a. Recelved $66.750 cash from customers on 1/1 for subscriptions that had already been earned in 2017. b. Purchased 10 new computer servers for $36,400 on 1/2: paid $15,700 cash and signed a three-year note for the remalnder owed. c. Paid $1,700 for an Internet advertisement run on 1/3. d. On January 4. purchased and recelved $5,400 of supplies on account. e. Recelved $210,000 cash on 1/5 from customers for service revenue earned In January. f. Pald $5.400 cash to a supplier on January 6. g. On January 7, sold 1.700 subscriptions at $14 each for services provided during January. Half was collected In cash and half was sold on account. h. Paid $350,000 in wages to employees on 1/30 for work done in January. 1. On January 31, recelved an electric and gas utility bill for $6.210 for January utility services. The bill wll be pald in February.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly
subscription of $14. At the start of January 2018. VGC's Income statement accounts had zero balances and Its balance
sheet account balances were as follows:
$1,730, e00
188,e00
Cash
Accounts Receivable
Supplies
Equipment
Bulldings
Land
15, 200
921,e00
508,e00
1,798,e08
153, e00
163, e00
124, e00
Accounts Payable
Deferred Revenue
Notes Payable (due 2825)
Connon Stock
Retained Earnings
2,900, e00
1,812, 200
In addition to the above accounts, VGC's chart of accounts Includes the following: Service Revenue, Salarles and Wages
Expense, Advertising Expense, and Utilities Expense. The following transactions occurred during the January month:
a. Recelved $66,750 cash from customers on 1/1 for subscriptions that had already been earned in 2017.
b. Purchased 10 new computer servers for $36,400 on 1/2; pald $15,700 cash and signed a three-year note for the
remalnder owed.
c. Paid $11.700 for an Internet advertisement run on 1/3.
d. On January 4. purchased and recelved $5.400 of supplies on account.
e. Recelved $210.000 cash on 1/5 from customers for service revenue earned in January.
f. Pald $5.400 cash to a supplier on January 6.
g. On January 7, sold 11.700 subscriptions at $14 each for services provided during January. Half was collected In cash and
half was sold on account.
h. Paid $350,000 In wages to employees on 1/30 for work done in January.
1. On January 31, recelved an electric and gas utlity bill for $6.210 for January utility services. The bill will be pald 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 account balances with a minus sign.)
Assets
Liabilities
Stockholders' Equity
a.
b.
C.
d.
e.
f.
h.
i.
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