Concept explainers
PROBLEM 3A-5 Transaction Analysis LO3-5
Star Videos, Inc., produces short musical videos for sale to retail outlets. The company's balance sheet accounts as of January71 are given below.
Because the videos differ in length and in complexity7 of production, the company uses a job-order costing system to determine the cost of each video produced. Studio (manufacturing)
Required:
- Using Exhibit 3A-1 as your guide, prepare a transaction analysis that records all of the above transactions. Calculate the ending balances at December 31 for all balance sheet accounts.
- Using Exhibit 3A-3 as your guide, prepare a schedule of cost of goods manufactured for the year. If done correctly', your cost of goods manufactured should equal what amount mentioned in the transactions above9
- Using Exhibit 3A-4 as your guide, prepare a schedule of cost of goods sold for the year. If done correctly', your unadjusted cost of goods sold should equal what amount mentioned in the transactions above9
- Using Exhibit 3A-5 as your guide, prepare an income statement for the year.
- Film, costumes, and similar raw materials purchased on account SI83,000.
- Film, costumes, and other raw materials issued to production, S210,000 (85% of this material was considered direct to the videos in production, and the other 15% was considered indirect).
- Utility costs incurred (on account) in the production studio, S78,000.
Depreciation recorded on the studio, cameras, and other equipment, S82,000. Three-fourths of this depreciation related to actual production of the videos, and the remainder related to equipment used in marketing and administration
- Advertising expense incurred (on account), S13L000.
- Salaries and wages paid in cash as follows:
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Managerial Accounting
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