Question

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Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $13. At the start of January 2018, VGC’s income statement accounts had zero balances and its balance sheet account balances were as follows:

Cash	$	2,340,000
Accounts Receivable		238,000
Supplies		17,000
Equipment		899,000
Buildings		467,000
Land		2,170,000
Accounts Payable		121,000
Deferred Revenue		121,000
Notes Payable (due 2025)		76,000
Common Stock		2,800,000
Retained Earnings		3,013,000

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:

1. Received $57,500 cash from customers on 1/1 for subscriptions that had already been earned in 2017.
2. Purchased 10 new computer servers for $42,800 on 1/2; paid $16,400 cash and signed a three-year note for the remainder owed.
3. Paid $15,300 for an Internet advertisement run on 1/3.
4. On January 4, purchased and received $3,250 of supplies on account.
5. Received $205,000 cash on 1/5 from customers for service revenue earned in January.
6. Paid $3,250 cash to a supplier on January 6.
7. On January 7, sold 17,300 subscriptions at $13 each for services provided during January. Half was collected in cash and half was sold on account.
8. Paid $400,000 in wages to employees on 1/30 for work done in January.
9. On January 31, received an electric and gas utility bill for $6,300 for January utility services. The bill will be paid in February.

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.)
3. Enter the beginning balances shown above in the following T-accounts and post the journal entries.
4. Prepare an unadjusted trial balance as of January 31, 2018.

Answer 1