Question

Required information The following information applies to the questions displayed below.) Vanishing Games Corporation (VGC) operates a massively multiplayer online game charging players a monthly subscription of $12. At the start of January 2018, VGC's income statement accounts had zero balances and its balance sheet account balances were as follows: Caah Accounts Receivable Supplies Equipment Marding Land Accounts Payable Deferred Revenue Notes Payable (due 2025 ) Common Stock Retained Earnings $1,590,000 245.000 17,800 922,000 435,000 1.250,00 137,600 140.000 81,000 2.800,000 1,301,00 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 $65,250 cash from customers on 11 for subscriptions that had already been earned in 2017. D. Purchased 10 new computer servers for $34,600 on 12 paid $14,400 cash and signed a three-year note for the remainder owed c. Paid $12,600 for an Internet advertisement run on 13. d. On January 4. purchased and received $3,300 of supplies on account e. Received $215,000 cash on 15 from customers for service revenue earned in January € Paid $3.300 cash to a supplier on January 6. 9. On January 7, sold 19,200 subscriptions at $12 each for services provided during January. Half was collected in cash and half was sold on account h Paid $420,000 in wages to employees on 1/30 for work done in January On January 31, received an electric and gas utility bill for $5,250 for January utility services. The bill will be paid in February 5. Prepare an Income Statement for the month ended January 31 2018. using unadjusted balances from part 4 VANISHINO GAMES CORPORATION Income Statement $

Answer 1

Answer

Vanishing Games Corporation

Income Statement

For the month ended January 31, 2018

Particulars	Amount	Amount
Service revenue		445400
Expenses:
Salaries and wages expense	420000
Advertising expense	12600
Utilities expense	5250
Total expenses		437850
Net Income		7550

Working note:

Service revenue = e + g

= 215000 + (19200 * 12)

= 445400

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