Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $14. At 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 Deferred Revenue Notes Payable (due 2025) Common Stock Retained Earnings $ 1,730,000 188,000 15,200 921,000 508,000 1,790,000 153,000 163,000 124,000 2,900,000 1,812, 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 $66,750 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 $36,400 on 1/2; paid $15,700 cash and signed a three-year note for the remainder owed. c. Paid $11,700 for an Internet advertisement run on 1/3. d. On January 4, purchased and received $5,400 of supplies on account. e. Received $210,000 cash on 1/5 from customers for service revenue earned in January. f. On January 6, paid $5,400 cash for supplies purchased on January 4. 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. i. On January 31, received an electric and gas utility bill for $6,210 for January utility services. The bill will be paid in February.
Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $14. At 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 Deferred Revenue Notes Payable (due 2025) Common Stock Retained Earnings $ 1,730,000 188,000 15,200 921,000 508,000 1,790,000 153,000 163,000 124,000 2,900,000 1,812, 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 $66,750 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 $36,400 on 1/2; paid $15,700 cash and signed a three-year note for the remainder owed. c. Paid $11,700 for an Internet advertisement run on 1/3. d. On January 4, purchased and received $5,400 of supplies on account. e. Received $210,000 cash on 1/5 from customers for service revenue earned in January. f. On January 6, paid $5,400 cash for supplies purchased on January 4. 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. i. On January 31, received an electric and gas utility bill for $6,210 for January utility services. The bill will be paid in February.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter3: Processing Accounting Information
Section: Chapter Questions
Problem 3.3E: The Effect of Transactions on the Accounting Equation For each of the following transactions,...
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Transcribed Image Text: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.
h.
i.
Assets
=
=
=
=
=
=
Liabilities
+
+
+
+
+
Stockholders' Equity
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 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
Deferred Revenue
Notes Payable (due 2025)
Common Stock
Retained Earnings
$ 1,730,000
188,000
15, 200
921,000
508,000
1,790,000
153,000
163,000
124,000
2,900,000
1,812, 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 $66,750 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 $36,400 on 1/2; paid $15,700 cash and signed a three-year note for the
remainder owed.
c. Paid $11,700 for an Internet advertisement run on 1/3.
d. On January 4, purchased and received $5,400 of supplies on account.
e. Received $210,000 cash on 1/5 from customers for service revenue earned in January.
f. On January 6, paid $5,400 cash for supplies purchased on January 4.
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.
i. On January 31, received an electric and gas utility bill for $6,210 for January utility services. The bill will be paid in
February.
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