06:45 Problem 3-17 (Algo) Cost Flows; T-Accounts; Income Statement (LO3-2, LO3-3, LO3-4] Supreme Videos, Incorporated, produces short musical videos for sale to retail outlets. The company's balance sheet accounts as of January 1, are given below. Assets Current assets: Cash Accounts receivable Inventories: Supreme Videos, Incorporated Balance Sheet January 1 Raw materials (film, costumes) Videos in process Finished videos awaiting sale Prepaid insurance Total current assets: Studio and equipment Less accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable $ 79,000 118,000 $ 46,000 24,000 97,000 167,000 12,200 376,200 536,000 Capital stock Retained earnings Total liabilities and stockholders' equity 762,000 226,000 $ 505,000 286,000 $ 912,200 $121,200 791,000 $ 912,200 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 is based on a cost formula that estimated $294,000 in manufacturing overhead for an estimated allocation base of 7,000 camera-hours. The following transactions occurred during the year: a. Film, costumes, and similar raw materials purchased on account, $201,000. b. Film, costumes, and other raw materials used in production, $216,000 (80% of this material was considered direct to the videos in production, and the other 20% was considered indirect). Next Check my work protu, diu te Quier zu was Lusty c. Utility costs incurred in the production studio, $88,000. d. Depreciation recorded on the studio, cameras, and other equipment, $100,000. Three-fourths of this depreciation related to production of the videos, and the remainder related to equipment used in marketing and administration. e. Advertising expense incurred on account, $146,000. f. Costs for salaries and wages were incurred as follows: Direct labor (actors and directors) Indirect labor (carpenters to build sets, costume designers, and so forth) Administrative salaries $ 98,000 $ 126,000 $111,000 9. Prepaid insurance expired during the year, $8,600 (75% related to production of videos, and 25% related to marketing and administrative activities). h. Miscellaneous marketing and administrative expenses incurred, $10,200. i. Studio (manufacturing) overhead was applied to videos in production. The company used 8,600 camera-hours during the year. J. Videos that cost $566,000 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 $957,000 and were all on account. The total cost to produce these videos according to their job cost sheets was $616,000. I. Collections from customers during the year totaled $866,000. m. Payments to suppliers on account during the year, $516,000; payments to employees for salaries and wages, $323,000. Required: 1. Prepare a T-account for each account on the company's balance sheet and enter the beginning balances. 2. Record the transactions directly into the T-accounts. 3. Is the Studio (manufacturing) Overhead account underapplied or overapplied for the year? By how much? 4. Prepare a schedule of cost of goods manufactured. 5. Prepare a schedule of cost of goods sold. 6. Prepare an income statement for the year. wars in the tabs below. Check my work Unis question by entering your answers in LIUM, Req 1 and 2 Req3 33.34 points 04:06:01 Req 4 Req 5 Req 6 Check my work Prepare a T-account for each account on the company's balance sheet and enter the beginning balances. Record the transactions directly into the Taus Debit Beginning Balance Cash Credit 79,000 Accounts Receivab Debit Cred Beginning Balance 118000 m Ending Balance 79,000 Ending Balance 118.000 Raw Materials Prepaid Insurance Debit Credit Debit Crudit Beginning Balance Beginning Balance Ending Balance Ending Balance Videos in Process Finished Goods Debit Credit Debit Cred Beginning Balance Beginning Balance Ending Balance Beginning Balance Ending Balance Beginning Balance Ending Balance Studio and Equipment Accumulated Depreciation Debit Credit Debit Crudk Beginning Balance Ending Balance Studio Overhead Depreciation Expense Debit Credit Debit Credit Beginning Balance Ending Balance Insurance Expense- Advertising Expense Debit Credit Debit Credit Beginning Balance Beginning Balance Miscellaneous Expense Administrative Salaries Expense Debit Credit Debit Credit Beginning Balance Next Submit Check my work Miscellaneous Expense Debit Credit Debit Beginning Balance Beginning Balance Ending Balance Administrative Salaries Expense Credit Cost of Goods Sold Sales Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Salaries & Wages Payable Accounts Payable Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Retained Earnings Credit Debit Ending Balance Capital Stock Debit Credit Next > Help Save & Exit Submit Check my work 04:05:22 Ending Balance Del Beginning Balance Ending Balance Arts Paya Su Retained Earnings Capital Block Debit Credit Debil Crest Beginning Balance Beginning Balance Ending Balance Ending Balance 3> Prev 3 of 3 Next > ative salaries $111,000 g. Prepaid insurance expired during the year, $8,600 (75% related to production of vide administrative activities). h. Miscellaneous marketing and administrative expenses incurred, $10,200. i. Studio (manufacturing) overhead was applied to videos in production. The company u j. Videos that cost $566,000 to produce according to their job cost sheets were transfe await sale and shipment. k. Sales for the year totaled $957,000 and were all on account. The total cost to produce sheets was $616,000. 1. Collections from customers during the year totaled $866,000. m. Payments to suppliers on account during the year, $516,000; payments to employees Required: 1. Prepare a T-account for each account on the company's balance sheet and enter the be 2. Record the transactions directly into the T-accounts. 3. Is the Studio (manufacturing) Overhead account underapplied or overapplied for the yea 4. Prepare a schedule of cost of goods manufactured. 5. Prepare a schedule of cost of goods sold. 6. Prepare an income statement for the year. Complete this question by entering your answers in the tabs below. Req 1 and 2. Req 3 Req 4 Req 5 Req 6 Is the Studio (manufacturing) Overhead account underapplied or overapplied for the year? By he Manufacturing overhead was overapplied by < Req 1 and 2 for the year. Req 4 > < Prev 3 of 3 Next Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Prepare a schedule of cost of goods manufactured. Direct materials: Supreme Videos, Incorporated Schedule of Cost of Goods Manufactured Total raw materials available Raw materials used in production Direct materials used in production Total manufacturing costs added to production Total manufacturing costs to account fo Cost of goods manufactured 0 4 the year. Complete this question by entering your answers in the tabs below. 04:04:49 Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Prepare a schedule of cost of goods sold. Supreme Videos, Incorporated Schedule of Cost of Goods Sold 15 25 ent for the year. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Prepare an income statement for the year. Supreme Videos, Incorporated Income Statement For the Year Ended December 31 Selling and administrative expenses: 0 0 $ 0 Req 5 Reg < Prev 3 of 3 Next >