Supreme Videos, Inc. produces short musical videos for sale to reteil outlets. The company's belerce sheet accounts of January 1, are given below. Supreme Videos, Inc. Balance Sheet January 1 Assets Current assets: Cash $ 84,80 Accounts receivable 123,000 Inventories: Raw naterials (film, costumes) $ 51,080 Videos in process 28,280 Finished videos awaiting sale 182, 180 173,00 Prepaid insurance 13,280 Total current assets 393,280 Studio and equipment 772,20 Less accunulated depreciation 231, 820 541,888 Total assets $934, 280 $ Liabilities and Stockholders' Equity Accounts payable $133,288 Capital stock $518,280 Retained earnings 291,880 881,090 Total liabilities and $934, 280 stockholders' equity Because the videos dffer in length and in complexity of production, the compeny uses a job order costing system to determine the cost of each video produced Studio manufacturing averhead is charged to videos on the basis of camero-hours of activity. The company's predetermined overhead rate for the year is based on a cost formula that estimated $225,000 in manufacturing overheed for an estimated alocation base of 5,000 camera hours. The following transactions occurred during the year a Film, costumes and similar raw materiais purchased on account. $206,000 b. Alm, costumes, and other raw materials used in production, $221000185% of this material was considered direct to the videos in production, and the other 15% was considered indirect. c. Utility costs incurred on account in the production studio, $92,000. d Depreciation recorded on the studio, comerus, and other equipment $105,000. Three-fourths of this depreciation related to production of the videos, and the remainder related to equirment used in marketing and administration e Advertising expense incurred an account, SIGLODO. f Costs for salaries and wages were incurred on account as follows $183, Direct labar (actors and directors) Indirect labor (carpenters ta build sets, costume designers, and so forth Administrative salaries $131,009 $116,008 Prepaid insurance expired during the year. $9,100 (90% related to production of videos, and 20% related to marketing and administrative activities) h Miscellaneous marketing and administrative cipenses incurred on account, $10,700. i Studio manufacturing overhead was applied to videos in production. The company used 8,000 camera tours during the year. | Videos that cost $574000 to produce according to their job cost sheets were transferred to the finished videos warehouse to wait sale and shipment k Sales for the year totaled $967,000 and were all on account. The total cost to produce these videos according to their job cost sheets was $621,000. Collections from customers during the year totaled $871,000 7. Payments to suppliers an account during the year, $-21,000; payments to employees for salaries and wages, 5328,000 Required: 1. Prepare a T-account for each account on the company's balance short and enter the beginning balances 2. Record the transactions directly into the accounts. Key your entries to the letters (a) through mabove. 3. Is the Stucio manufacturing Overhead account underapplied or everapplied for the year? 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. Reg 1 Reg 3 and 2 Reg 4 Reg 5 Req 6 Prepare a T-account for each account on the company's balance sheet and enter the beginning balances. Recard the transactions directly into the T-accounts. Cash Accounts Receivable Beg Bal. 84.000 849,000 Beg Bal 123.000 871.000 871,00 m. k 957 000 End. Bal. 108,000 End. Bal . 219.000 Raw Materials Beg. Bal. 102,000 821,000 a. 571,000 b. Prepaid Insurance Beg. Bali 13200 2,100 19 End. Bal. 52,000 End. Bal. 4.100 Finished Goods Beg, Bal 102.000 621,000 671000 Videos In Process 20,000 571,000 187,8 103,000 300,000 Beg Bal h. End. Bal. 52.000 End. Bal. 99,850 Studio and Equipment Accumulated Depreciation Beg Bal Beg Bal 10
