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 $ 82,000 Accounts receivable 121, 000 Inventories : Raw materials (film, costumes) $ 49,900 Videos in process 22,000 Finished videos awaiting sale 100,000 171,000 Prepaid insurance 12, 800 Total current assets 386, 800 Studio and equipment 768, 000 Less accumulated depreciation 229,000 539,000 Total assets $925, 800 Liabilities and Stockholders Equity Accounts payable $128, 800 Capital stock $ 508, 000 Retained earnings 289,000 797,000 Total liabilities and stockholders' equity $925,800 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, $204,000. b. Film, costumes, and other raw materials used in production, $219,000 (75% of this material was considered direct to the videos in production, and the other 25% was considered indirect). c. Utility costs incurred on account in the production studio, $91,000. d. Depreciation recorded on the studio, cameras, and other equipment, $103,000. 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, $149,000. f. Costs for salaries and wages were incurred on account as follows:Direct labor (actors and directors) $ 101,000 Indirect labor (carpenters to build sets, costume designers, and so forth) $ 129,000 Administrative salaries $ 114,000 g. Prepaid insurance expired during the year, $8,900 (70% related to production of videos, and 30% related to marketing and administrative activities). h. Miscellaneous marketing and administrative expenses incurred on account, $10,500. i. Studio (manufacturing) overhead was applied to videos in production. The company used 9,500 camera-hours during the year. J. Videos that cost $569,000 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 $963,000 and were all on account. The total cost to produce these videos according to their job cost sheets was $619,000. I. Collections from customers during the year totaled $869,000. m. Payments to suppliers on account during the year, $519,000; payments to employees for salaries and wages, $326,000. 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? 4. Prepare a schedule of cost of goods manufactured. 5. Prepare a schedule of cost of goods sold.Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Reg 4 Req 5 Prepare a schedule of cost of goods sold. Supreme Videos, Inc. Schedule of Cost of Goods Sold