Hello, I need assistance with requirement 1 for the following question. Thank you so much in advance!
Star Videos, Inc., produces short musical videos for sale to retail outlets. The company's balance sheet accounts as of January 1 are given below. Star Videos; Inc. Balance Sheet January 1 Assets Cash 5 36 , 200 Accounts receivable 110,200 Inventories: Raw materials (film, costumes} $39,000 Videos in process 60,600 Finished videos awaiting sale 9?,000 196,600 Prepaid insurance 9,300 Studio and equipment (netl 563,000 Total assets 5965-300 Liabilities and Stockholders' Equity Accounts payable $163,000 Retained earnings 302,300 Total liabilities and stockholders' equity 5965-300 Because the videos differ in length and in complexity of production. the company uses a job-order costing system to determine the cost of each video produced. Studio [manufacturing] overhead is charged to videos on the basis of camera-hours of activity. The company's predetermined overhead rate for the year {$40 per camera-hour} is based on a cost formula that estimated $280,000 in manufacturing overhead for an estimated allocation base of 7,000 camera-hours. Any underapplied or overapplied overhead is closed to cost of goods sold. The following transactions were recorded for the year: a. Film, costumes. and similar rawr materials purchased on account, $215,500. b. Film, costumes. and other raw materials issued to production, $244,000 {85% of this material was considered direct to the videos in production, and the other 15% was considered indirect}. c. Utility costs incurred {on account] in the production studio, $86,400. d. Depreciation recorded on the studio, cameras, and other equipment, $99,600. Three-fourths of this depreciation related to actual production of the videos, and the remainder related to equipment used in marketing and administration. e. Advertising expense incurred (on account), $151,000. f. Salaries and wages paid in cash as follows: Direct labor [actors and directors} 5 95,000 Indirect labor (carpenters to build sets, costume $79 000 designers, and so forth) ' Administrative salaries $102,000 g. Prepaid insurance expired during the year, $13,700 (70% related to production of videos, and 30% related to marketing and administrative activities). h. Miscellaneous marketing and administrative expenses incurred (on account], $12,650. i. Studio (manufacturing) overhead was applied to videos in production. The company recorded 7,250 camera-hours of activity during the year. j. Videos that cost $518,000 to produce according to theirjob cost sheets were transferred to the nished videos warehouse to await sale and shipment. k. Sales for the year totaled $918,000 and were all on account |. The total cost to produce the videos that were sold according to theirjob cost sheets was $623,910. m. Collections from customers during the year totaled $923,000. n. Payments to suppliers on account during the year, $569,000. 0. Underapplied or overapplied overhead 1; '? . Required: 1. Prepare a transaction analysis that records all of the above transactions. 2. Prepare a schedule of cost of goods manufactured for the year. 3. Prepare a schedule of cost of goods sold for the year. 4. Prepare an income statement for the year. Prepare a transaction analysis that records all of the above transactions. (Amounts to be deducted should be indicated by a minus sign.) Star Videos, Inc. Transaction Analysis For the Year Ended December 31 Accounts Videos in Manufacturing Prepaid Studio & Cash Finished Accounts Retained Receivable Raw Materials Process Goods Overhead Insurance Equipment (net Payable Earnings Beginning balance @1/1 86,200 $ 110,200 $ 39,000 60,600 97,000 $ 9,300 $ 563,000 = S 163,000 S 802,300 (a) Raw material purchases (b) Raw materials used (c) Utility costs (d) Depreciation charges (e) Advertising (f) Salaries & wages (g) Prepaid insurance h) |Miscellaneous marketing (i) Applied overhead () Transfer completed videos to finished goods (k) Sales (1) Transfer finished goods to cost of goods sold (m) Cash collections from customers (n) Payment to suppliers (0) Ending balances @ 12/31
