Hello, I need assistance with requirement 3 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 schedule of cost of goods sold for the year. Star Videos, Inc. Schedule of Cost of Goods Sold For the Year Ended December 31
