Problem 3-17 Cost Flows; T-Accounts; Income Statement [LO3-2, LO3-3, LO3-4] Supreme Videos, Inc., produces short musical videos for sale to retail outlets. The company's balance sheet accounts as of January 1, are given below Supreme Videos, Inc. Balance Sheet January 1 Assets Current assets: Cash Accounts receivable Inventories: $ 73,000 112,000 Raw materials (film, costumes) $ 40,000 32,000 91,000 Videos in process Finished videos awaiting sale 163,000 11,000 359,000 Prepaid insurance Total current assets Studio and equipment 750,000 220,000 Less accumulated depreciation Total assets 530,000 $889,000 Liabilities and Stockholders' Equity $179,000 Accounts payable Capital stock Retained earnings Total liabilities and stockholders' equity $430,000 280,000 710,000 $889,000 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. Key your entries to the letters (a) through (m) above 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. Studio and Equipment Accumulated Depreciation Beg. Bal Beg. Bal. End. Bal End. Bal. Studio Overhead Depreciation Expense Beg. Bal. Beg. Bal End. Bal End. Bal. Insurance Expense Advertising Expense Beg. Bal Beg. Bal Miscellaneous Expense Administrative Salaries Expense Beg. Bal Beg. Bal End. Bal Cost of Goods Sold Sales Beg. Bal Beg. Bal. End. Bal. End. Bal. Salaries & Wages Payable Accounts Payable Beg. Bal Beg. Bal. End. Bal. End. Bal Retained Earnings Capital Stock Beg. Bal Beg. Bal. End. Bal. End. Bal. Is the Studio (manufacturing) Overhead account underapplied or overapplied for the year. by Manufacturing overhead was for the year. Prepare a schedule of cost of goods sold. Supreme Videos, Inc. Schedule of Cost of Goods Sold Prepare an income statement for the year. SUPREME VIDEOS, INC. Income Statement For the Year Ended December 31 Selling and administrative expenses