Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $13. At the start of January 2021, VGC’s income statement accounts had zero balances and its balance sheet account balances were as follows: Cash $ 1,600,000 Accounts Receivable 174,000 Supplies 15,100 Equipment 930,000 Buildings 510,000 Land 2,050,000 Accounts Payable 113,000 Deferred Revenue 74,000 Notes Payable (due 2025) 94,000 Common Stock 2,500,000 Retained Earnings 2,498,100 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. The following transactions occurred during the January month: Received $57,750 cash from customers on 1/1 for subscriptions that had already been earned and charged on account in 2020. Purchased 10 new computer servers for $41,500 on 1/2; paid $11,500 cash and signed a three-year note for the remainder owed. Paid $14,300 for an Internet advertisement that ran today on 1/3. On January 4, purchased and received $5,300 of supplies on account. Received $150,000 cash on 1/5 from customers for service revenue earned but not previously recorded in January. On January 6, paid $5,300 cash for supplies purchased on January 4. On January 7, sold 19,900 subscriptions at $13 each for services provided during January. Half was collected in cash and half was sold on account. Paid $380,000 in wages to employees on 1/30 for work done in January. On January 31, received an electric and gas utility bill for $6,260 for January utility services. The bill will be paid in February. Enter the beginning balances shown above in the following T-accounts and post the journal entries.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $13. At the start of January 2021, VGC’s income statement accounts had zero balances and its
| Cash | $ 1,600,000 |
|---|---|
| 174,000 | |
| Supplies | 15,100 |
| Equipment | 930,000 |
| Buildings | 510,000 |
| Land | 2,050,000 |
| Accounts Payable | 113,000 |
| Deferred Revenue | 74,000 |
| Notes Payable (due 2025) | 94,000 |
| Common Stock | 2,500,000 |
| 2,498,100 |
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. The following transactions occurred during the January month:
- Received $57,750 cash from customers on 1/1 for subscriptions that had already been earned and charged on account in 2020.
- Purchased 10 new computer servers for $41,500 on 1/2; paid $11,500 cash and signed a three-year note for the remainder owed.
- Paid $14,300 for an Internet advertisement that ran today on 1/3.
- On January 4, purchased and received $5,300 of supplies on account.
- Received $150,000 cash on 1/5 from customers for service revenue earned but not previously recorded in January.
- On January 6, paid $5,300 cash for supplies purchased on January 4.
- On January 7, sold 19,900 subscriptions at $13 each for services provided during January. Half was collected in cash and half was sold on account.
- Paid $380,000 in wages to employees on 1/30 for work done in January.
- On January 31, received an electric and gas utility bill for $6,260 for January utility services. The bill will be paid in February.
- Enter the beginning balances shown above in the following T-accounts and
post the journal entries.
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