Problem 3-17 (Algo) Cost Flows; T-Accounts; Income Statement (LO3-2, LO3-3, L03.4) 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. Supreme Videos, Incorporated Balance Sheet January 1 Assets Current assetst Cash $ 68,000 Nccounts receivable 107,000 Inventories: Raw materials (film, costumes) $ 35,000 Videos in process 25,000 Finished videos awaiting sale 86,000 146,000 Prepaid insurance 10,000 Total current assets 331,000 Studio and equipment 740,000 Less accumulated depreciation 215,000 525,000 Total assets $ 856,000 Llabilities and Stockholders' Equity Accounts payable $ 156,000 Capital stock 5 425,000 Retained earnings 275,000 700,000 Total Habilities and stockholders' equity $ 856,000 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 $360,000 in manufacturing qverhead for an estimated allocation base of 9,000 camera hours. The following transactions occurred during the year 3. Film, costumes, and similar raw materials purchased on account, $190,000 b. Film, costumes, and other raw materials used in production, $205,000 (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, $77,000 d. Depreciation recorded on the studio, cameras, and other equipment. $89,000. 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, $135.000 1. Costs for salaries and wages were incurred as follows: Problem 3-17 (Algo) Cost Flows; T-Accounts; Income Statement (LO3-2, LO3-3, L03.4) 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. Supreme Videos, Incorporated Balance Sheet January 1 Assets Current assetst Cash $ 68,000 Nccounts receivable 107,000 Inventories: Raw materials (film, costumes) $ 35,000 Videos in process 25,000 Finished videos awaiting sale 86,000 146,000 Prepaid insurance 10,000 Total current assets 331,000 Studio and equipment 740,000 Less accumulated depreciation 215,000 525,000 Total assets $ 856,000 Llabilities and Stockholders' Equity Accounts payable $ 156,000 Capital stock 5 425,000 Retained earnings 275,000 700,000 Total Habilities and stockholders' equity $ 856,000 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 $360,000 in manufacturing qverhead for an estimated allocation base of 9,000 camera hours. The following transactions occurred during the year 3. Film, costumes, and similar raw materials purchased on account, $190,000 b. Film, costumes, and other raw materials used in production, $205,000 (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, $77,000 d. Depreciation recorded on the studio, cameras, and other equipment. $89,000. 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, $135.000 1. Costs for salaries and wages were incurred as follows: