Star Videos, Inc., produces short musical vide os for sale to retail outlets. The company's balan ce sheet accounts as of January 1 are given below. Star Videos, Inc Balance Sheet January 1 Assets Cash Accounts receivable Inventories Raw materials (film, costumes) Videos in proce ss Finished videos awaiting sale Prepaid insurance Studio and equipment (net) S 89,000 107,600 $10,600 50,600 91,800 153,000 10,000 583,000 $ 942,600 Total assets Liabilities and Stockholders' Equity Accounts payable Retained earnings Total liabilities and stockholders' equity $ 216,000 726,600 $ 942,600 Because the vid eos 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 ch arged 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 manu facturing overhead for an estimated allocation base of 7,000 camera-hours. Any underappl ied or overapplied overhead is closed to cost of goods sold. The following transactions were recorded for the year a. Film, costumes, and similar raw materials purchased on account, $190,000. b. Film, costumes, and other raw materials issued to production, $196,000 (85% of this material was consid ered direct to the videos in produ ction, and the other 15% was considered indirect). c. Utility costs in curred (on account) in the production studio, $88,000 d. Depreciation recorded on the studio, cameras, and other equipment, $110,800. 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), $170,500. f. Salaries and wages paid in cash as follows: Direct labor (actors and directors) Indirect labor (carpenters to build sets, costume designers, and so forth) $68,000 Administrative salaries $92,800 $102,200 g.Prepaid insurance expired during the year, $7,900 (70% related to production of videos, and 30% related to marketing and admin istrative activiti es) h. Miscellaneous marketing and administrative expenses incurred (on account), $11,500 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 $578,000 to produce accord ing to their job cost sheets were transferred to the finished videos warehouse to await sale and shipment. k. Sales for the year totaled $1,016,000 and were all on account . The total cost to produce the videos that were sold according to their job cost sheets was $623,910 m. Collections from customers during the year totaled $966,000 n. Payments to suppliers on account during the year, $537,000. o. Underapplied or overapplied overhead S_2 Required: 1. Prepare a transaction analysis that records all of the above transactions. 2. Prepare a sched ule of cost of goods manufactured for the year. 3. Prepare a sched ule of cost of goods sold for the year. 4. Prepare an income statement for the year. Prepare an income statement for the year. Star Videos, Inc. Income Statement For the Year Ended December 31 Star Videos, Inc., produces short musical vide os for sale to retail outlets. The company's balan ce sheet accounts as of January 1 are given below. Star Videos, Inc Balance Sheet January 1 Assets Cash Accounts receivable Inventories Raw materials (film, costumes) Videos in proce ss Finished videos awaiting sale Prepaid insurance Studio and equipment (net) S 89,000 107,600 $10,600 50,600 91,800 153,000 10,000 583,000 $ 942,600 Total assets Liabilities and Stockholders' Equity Accounts payable Retained earnings Total liabilities and stockholders' equity $ 216,000 726,600 $ 942,600 Because the vid eos 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 ch arged 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 manu facturing overhead for an estimated allocation base of 7,000 camera-hours. Any underappl ied or overapplied overhead is closed to cost of goods sold. The following transactions were recorded for the year a. Film, costumes, and similar raw materials purchased on account, $190,000. b. Film, costumes, and other raw materials issued to production, $196,000 (85% of this material was consid ered direct to the videos in produ ction, and the other 15% was considered indirect). c. Utility costs in curred (on account) in the production studio, $88,000 d. Depreciation recorded on the studio, cameras, and other equipment, $110,800. 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), $170,500. f. Salaries and wages paid in cash as follows: Direct labor (actors and directors) Indirect labor (carpenters to build sets, costume designers, and so forth) $68,000 Administrative salaries $92,800 $102,200 g.Prepaid insurance expired during the year, $7,900 (70% related to production of videos, and 30% related to marketing and admin istrative activiti es) h. Miscellaneous marketing and administrative expenses incurred (on account), $11,500 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 $578,000 to produce accord ing to their job cost sheets were transferred to the finished videos warehouse to await sale and shipment. k. Sales for the year totaled $1,016,000 and were all on account . The total cost to produce the videos that were sold according to their job cost sheets was $623,910 m. Collections from customers during the year totaled $966,000 n. Payments to suppliers on account during the year, $537,000. o. Underapplied or overapplied overhead S_2 Required: 1. Prepare a transaction analysis that records all of the above transactions. 2. Prepare a sched ule of cost of goods manufactured for the year. 3. Prepare a sched ule of cost of goods sold for the year. 4. Prepare an income statement for the year. Prepare an income statement for the year. Star Videos, Inc. Income Statement For the Year Ended December 31