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 $ 75,000 114,800 Supreme Videos, Inc. Balance Sheet January 1 Assets Curront assets Cash Accounts receivable Inventories: 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 Capital stock Retained earnings Total liabilities and stockholders' equity $ 42,00 20,000 93,000 155,000 11,400 355,400 754,600 222, cea 532,000 5887,400 5184,400 $501,900 282, 783,000 $887,409 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 overhead for an estimated allocation base of 9,000 camera-hours. The following transactions occurred during the year a. Film, costumes, and similar raw materials purchased on account, $197.000. b. Film, costumes, and other raw materials used in production, $212,000 (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, $84,000. Depreciation recorded on the studio, cameras and other equipment. $96.000 Three-fourths of this depreciation relaterte Wit-RJ, IUWICE TUN HULETI CU UUUUUUUU NI MTU WOT CURSIVOICICLUTC WW= production, and the other 15% was considered indirect). c. Utility costs incurred in the production studio, $84.000. d. Depreciation recorded on the studio, cameras, and other equipment. $96,000. Three-fourths of this depreciation related to production of the videos, and the remainder related to equipment used in marketing and administration . Advertising expense incurred on account, $142,000 1. Costs for salaries and wages were incurred as follows: bok $94.000 Direct labor (actors and directors) Indirect labor (carpenters to build sets) costume designers, and so forth) Administrative salaries $ 122,000 $ 107,000 nt ences 9. Prepaid insurance expired during the year. $8,200 (80% related to production of videos, and 20% related to marketing and administrative activities) h. Miscellaneous marketing and administrative expenses incurred, $9,800 1. Studio (manufacturing) overhead was applied to videos in production. The company used 9100 camera-hours during the year. J. Videos that cost $562,000 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 $949,000 and were all on account. The total cost to produce these videos according to their job cost sheets was $612,000. 1. Collections from customers during the year totaled $862,000. m. Payments to suppliers on account during the year. $512,000, payments to employees for salaries and wages, $303,000 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. Cash Accounts Receivable Beg. Bal Beg. Bal. End, Bal End. Bal. Raw Materials Prepaid Insurance Beg. Bal Beg. Bal. End. Bal. End. Bal Videos in Process Finished Goods Beg Bal Beg Bal End. Bal End. Bal. Studio and Equipment Accumulated Depreciation Beg. Bal. Beg Bal Studio Overhead Depreciation Expense Beg Bar Beg Bal End Bal End Bal Insurance Expense Beg Bal Advertising Expense Beg Bal Miscellaneous Expense Administrative Salaries Expense Beg Bal Beg Bal End Bal Cost of Goods Sold Sales Beg Bal Beg Bai End Bal End Bal Salaries & Wages Payable Accounts Payable Beg Bal Beg Bal End. Bat End Bal Retained Earning Capital Stack Beg Bal Bog Bal End B End Bal Req3 > Is the Studio (manufacturing) Overhead account underapplied or overapplied for the year? By Manufacturing overhead was by for the year Prepare a schedule of cost of goods manufactured. Supreme Videos, Inc. Schedule of Cost of Goods Manufactured Direct materials: 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 for 0 Cost of goods manufactured Supreme Videos, Inc. Schedule of Cost of Goods Sold Req 1 and 2 Req3 Req 4 Reg 5 Req 6 Prepare an income statement for the year. Supreme Videos, Inc. Income Statement For the Year Ended December 31 0 Selling and administrative expenses: 0 $ $ 0