$63,700 104,000 Supreme Videos, Inc. Balance Sheet January 1 Assets Current assets: Cash Accounts receivable Inventories: Raw materials(film, costumes) $33,600 Videos in process 48,300 Finished videos awaiting sale 82.800 Prepaid insurance Total current assets Studio and equipment 740.000 Less accumulated depreciation 211,000 Total assets Liabilities and Stockholders' Equity Accounts payable Capital stock $422.000 Retained earnings 282,700 Total liabilities and stockholders' equity 164,700 9,300 341,700 529,000 $870,700 $166,000 704 700 $870,700 Because the videos differ in length and in complexity of production, the company uses a joborder 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. At the beginning of the year, the company estimated that it would work 7,300 camera-hours and incur $438,000 in studio overhead cost. The following transactions were recorded for the year. a. Film, costumes, and similar raw materials purchased on account, $189,000 b. Film, costumes, and other raw materials issued to production, $202,000 (85% of this material was considered direct to the videos in production, and the other 15% was considered indirect). c. Utility costs incurred in the production studio, $72,200. d. Depreciation recorded on the studio, cameras, and other equipment, $88,000. 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, $133,000 f. Costs for salaries and wages were incurred as follows: Direct labor(actors and directors) Indirect lahor Icarenters to build sets $82,250 d Depreciation recorded on the studio, cameras, ailu ouer equipment, 300,0UU. TV-TUULUIS UN UNIS depreciation related to actual production of the videos, and the remainder related to equipment used in marketing and administration e. Advertising expense incurred, $133,000 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 $82,250 $114,000 $95 100 g. Prepaid insurance expired during the year. $8,000 (80% related to production of videos, and 20% related to marketing and administrative activities) h. Miscellaneous marketing and administrative expenses incurred, $8,900. i. Studio (manufacturing) overhead was applied to videos in production. The company recorded 7,300 camera-hours of activity during the year. 1. Videos that cost $558,000 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 $934,000 and were all on account. The total cost to produce these videos according to their job cost sheets was $609,000 1. Collections from customers during the year totaled $851,000. m. Payments to suppliers on account during the year, $506,000, payments to employees for salaries and wages, $290,350 Requirement 1: Prepare a T-account for each account on the company's balance sheet and enter the beginning balances Make an entry, treating it as transaction "n" in the T-accounts to close any balance in the Studio Overhead account to Cost of Goods Sold (Record the transactions in the given order. Omit the "$" sign in your response.) Cash (m) Beg Bal (1) 63,700 851,000 End. Bal 624,350 Accounts Receivable Beg Bal Beg Bal. 0 851,000 End. Bal 624,350 Accounts Receivable Beg. Bal. (k) End. Bal. Raw Materials Beg Bal. End Bal. Prepaid Insurance Beg Bal. (9) End. Bal. Videos in Process Beg Bal 6) End. Bal Finished Goods Finished Goods Beg. Bal 0 End. Bal Studio and Equipment Bal. Accumulated Depreciation Beg. Bal. (d) End Bal Studio Overhead End. Bal. Depreciation Expense Insurance Expense Advertising Expense Miscellaneous Expense Sales Cost of Goods Sold (n) End. Bal. Accounts Payable (m) Beg Bal. End. Bal Salaries & Wages Payable Bal. Capital Stock Bal. Retained Earnings Bal. Requirement 2: Was manufacturing overhead underapplied or overapplied for the year? (Input the amount as positive value. Omit the "$" sign in your response.) Manufacturing Capital Stock Bal Retained Earnings Bal Requirement 2: Was manufacturing overhead underapplied or overapplied for the year? (Input the amount as positive value. Omit the "$" sign in your response.) Manufacturing overhead was (Click to select) by $ for the year. Requirement 3: Prepare an income statement for the year. (Input all amounts as positive values. Omit the "$" sign in your response.) Supreme Videos, Inc. Income Statement For the Year Ended December 31 (Click to select) (Click to select) Gross margin Selling and administrative expenses: (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) References Worksheet