Supreme Videos, Inc., produces short musical videos for sale to retail outlets. The company's balance sheet accounts as of January1, are given below. Supreme Videos, Inc. Balance Sheet January 1 Assets Current assets: Cash $ 20,000 Accounts receivable 109,000 Inventories: Raw materials ('Film, costumes) 1. 32,088 Videos in process 52,000 Finished videos awaiting sale EEJGBB 1??,600 Prepaid insurance 13:43'9 "otal current assets 356,400 Studio and equipment 244,000 Less accumulated depreciation 212,000 522,609 "otal assets 58932-409 Liabilities and Stockholders' Equity Accounts payable $189,400 Capital stock $422,000 Retained earnings 22?,000 204,000 Total liabilities and stockholders' equity 5393;409 Because the videos differ in length and in complexity of production, the company uses a joborder costing system to determine the cost of each video produced. Studio {manufacturing} overhead is charged to videos on the basis of camerahours of activity. The company's predetermined overhead rate for the year is based on a cost formula that estimated $240,000 in manufacturing overhead for an estimated allocation base of 5,000 ca merahours. The following transactions occurred during the year: a. Film, costumes, and similar raw materials purchased on account, $192,000. b. Film, costumes, and other raw materials used in production, $207,000 [80% of this material was considered direct to the videos in production, and the other 20% was considered indirect]. c. Utility costs incurred in the production studio, $29,000. d. Depreciation recorded on the studio, cameras, and other equipment, $01,000. Th recfourths 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, $132,000. f. Costs for salaries and wages were incurred as follows: Direct labor (actors and directors] 5 89,000 Indirect labor (carpenters to build sets, costume designers, and so forth) $ 112,000 Administrative salaries 5 102,000 a. Film, costumes, and similar raw materials purchased on account, $192,000. b. Film, costumes, and other raw materials used in production, $207,000 [80% of this material was considered direct to the videos in production, and the other 20% was considered indirect}. c. Utility costs incurred in the production studio, $79,000. d. Depreciation recorded on the studio, cameras, and other equipment, $91,000. Threefourths 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, $137,000. 1'. Costs for salaries and wages were incurred as follows: Direct labor (actors and directors] $ 89,660 Indirect labor (carpenters to build setsJ costume designers, and so forth) $ 117,600 Administrative salaries $ 162,660 g. Prepaid insurance expired during the year, $7,700 (75% related to production of videos, and 25% related to marketing and administrative activities]. h. Miscellaneous marketing and administrative expenses incurred, $9,300. i. Studio {manufacturing} overhead was applied to videos in production. The company used 7,000 camerahours during the year. j. Videos that cost $557,000 to produce according to theirjob cost sheets were transferred to the nished videos warehouse to await sale and shipment. k. Sales for the year totaled $939,000 and were all on account. The total cost to produce these videos according to theirjob cost sheets was $607,000. l. Collections from customers during the year totaled $857,000. m. Payments to suppliers on account during the year, $507,000; payments to employees for salaries and wages, $292,000. Required: 1. Prepare a Taccount for each account on the company's balance sheet and enter the beginning balances. 2. Record the transactions directly into the Taccounts. 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. Req 1 and 2 Req 3 Reg 4 Reg 5 Req 6 Prepare a T-account for each account on the company's balance sheet and enter the beginning balances. Record the transaction accounts. Cash Accounts Receivable Beg. Bal. Beg. Bal. m. End. Bal. End. Bal Raw Materials Prepaid Insurance Beg. Bal. Beg. Bal. a. 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 End. Bal End. Bal.Studio and Equipment Accumulated Depreciation Beg. Bal. Beg. Bal End. Bal End. Bal. 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.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