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. Dalance Sheet January1 Assets Cash Accounts receivable Inventories: 90,800 104,200 Raw materiale (fi1m, costumen) Videos in process Pinished videos awasting sale Prepaid insurance Studio and equipment (net) Total ansets Liabilities and Stockholders' Equity Accounts payable Retained earning Total liabilities and stockholdera' equity $26,400 51,000 97.800 165,200 8,550 568,000 936,750 30290 s 244,000 692,75O 936,750 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 raw materials purchased on account, $214,000. b. Film, costumes, and other raw materials issued to production, $230,000(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, $91,800. d. Depreciation recorded on the studio, cameras, and other equipment, $96,400. 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), $149.000 f. Salaries and wages paid in cash as follows: S 90,400 s 83,500 113,200 Direct 1abor (actors and directors Indirect labor (earpenters to baild sets, costume designers, and so forth) Adminiatrative salarles g. Prepaid insurance expired during the year, $7,800 (70% related to production of videos, and 30% related to marketing and administrative activities) h. Miscellaneous marketing and administrative expenses incurred (on account), $9.900 L Studio (manufacturing) overhead was applied to videos in production. The company recorded 7,250 camera-hours of activity during the year , Videos that cost $552,000 to produce according to their job cost sheets were transferred to the finished videos warehouse to await sale and shipment. k. Sales for the year totaled $1,110,000 and were all on account L The total cost to produce the videos that were sold according to their job cost sheets was $596,090 m. Collections from customers during the year totaled $1,060,000. n. Payments to suppliers on account during the year, $610,000. o. Underannlied or overapnlied overhead $ ? n. Payments to suppliers on account during the year, $610,000. o.Underapplied or overapplied overhead $ ? - Required: 1. Prepare a transaction analysis that records all of the above transactions. Calculate the ending balances at December 31 balance sheet accounts. 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 December 31for all Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 Required 4 Prepare a transaction analysis that records all of the above transactions. Calculate the ending balances at December 31 for all balance sheet accou Star Videos, Inc. Transaction Analysis For the Year Ended December 31 Accounts Raw MaterialsProcess Cash Receivable Videos in Finished Manufacturing Prepaid Insurano Videos S90,800S 104,200 26,400 51,000 87,800 8, Beginning balance @1/1 (a) Raw material purchases
