Supreme Videos, Inc.. produces short musical videos for sale to retall outlets. The company's balance sheet accounts as of January 1, are given below. $ 71,000 110,000 Supreme Videon, Inc. Balance sheet January 1 Assets Current assets: Cash Accounts receivable Inventories: Raw materiale (film, costumes) videos in process Finished videos avasting sale Prepaid insurance Zotal current assets Studio and equipment tess accumulated depreciation Total assets Liabilities and stockholders' Equity Accounts payable Capital stock Retained earnings Total liabilities and stockholders equity $30,000 30,000 89,000 157.000 10.600 348,600 746,000 210,000 320,000 3876,600 $170.600 5429.000 278,000 705.000 5876,600 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 $282,000 in manufacturing overhead for an estimated allocation base of 6,000 camera hours. The following transactions occurred during the year a Film, costumes, and similar raw materials purchased on account, 193,000 b. Film, costumes, and other raw materials used in production, $200,000 (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, $80,000 d. Depreciation recorded on the studio, camera, and other equipment, $92,000. Three fourtha 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. $138.000 Costs for salaries and woges were incurred as follows: for an estimated allocation base of 6,000 camera-hours. The following transactions occurred during the year a. Film, costumes, and similar raw materials purchased on account, $193,000. b. Film, costumes, and other raw materials used in production, $208,000 (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, $80,000 d. Depreciation recorded on the studio, cameras, and other equipment, $92,000. 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, $138,000 1. Costs for salaries and wages were incurred as follows: $ 90,000 Direct Labor (actors and director) Indirect labor (carpenters to build sets, contume designers, and so forth) Administrative salaries $120,000 $ 103,000 9. Prepaid Insurance expired during the year, $7,800 (75% related to production of videos, and 25% related to marketing and administrative activities) h. Miscellaneous marketing and administrative expenses incurred, 59,400. Studio (manufacturing) overhead was applied to videos in production. The company used 7,500 camera-hours during the year. J. Videos that COM $558,000 to produce according to their job cost sheets were transferred to the finished videos warehouse to swart sale and shipment k Sales for the year totaled $941,000 and were all on account. The total cost to produce these videos according to their job cost 1. Collections from customers during the your totaled $858,000 m. Payments to suppliers on account during the year. $508,000, payments to employees for salaries and wages. $293,000 Required: 1. Prepare o Taccount for each account on the company's balance sheet and onto the beginning balances 2. Record the transactions directly into the accounts, Key your entries to the letters (a) through 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 1 Prepare a T-account for each account on the company's balance sheet and enter the beginning balances. Record the transactions directly into the T- accounts. Cash Accounts Receivable 110,000 Beg. Bal 71.000 Beg Bat End. Bal 71.000 End Bal 110,000 Raw Materials Prepaid Insurance Beg Bal Gegal End. Bal End. Bal Videos in Process Finished Goods Bes Bal Beg Bal ED Find a Recumulated Depreciation BB End www Toro Next > Insurance Expense Advertising Expense Beg Bal Beg. Ball Miscellaneous Expense Administrative Salaries Expense Beg. Bat. Beg. Bal. End. Bail Cost of Goods Sold Sales Beg Bal Beg Bal End. Bal End, Bal Salates & Wages Payable Accounts Payable Beg Beg Bal End Endal Retained Earnings Capital Stock Bog Dal ED Endbal 1 of FH Next > Supreme Videos, Inc.. produces short musical videos for sale to retall outlets. The company's balance sheet accounts as of January 1, are given below. $ 71,000 110,000 Supreme Videon, Inc. Balance sheet January 1 Assets Current assets: Cash Accounts receivable Inventories: Raw materiale (film, costumes) videos in process Finished videos avasting sale Prepaid insurance Zotal current assets Studio and equipment tess accumulated depreciation Total assets Liabilities and stockholders' Equity Accounts payable Capital stock Retained earnings Total liabilities and stockholders equity $30,000 30,000 89,000 157.000 10.600 348,600 746,000 210,000 320,000 3876,600 $170.600 5429.000 278,000 705.000 5876,600 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 $282,000 in manufacturing overhead for an estimated allocation base of 6,000 camera hours. The following transactions occurred during the year a Film, costumes, and similar raw materials purchased on account, 193,000 b. Film, costumes, and other raw materials used in production, $200,000 (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, $80,000 d. Depreciation recorded on the studio, camera, and other equipment, $92,000. Three fourtha 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. $138.000 Costs for salaries and woges were incurred as follows: for an estimated allocation base of 6,000 camera-hours. The following transactions occurred during the year a. Film, costumes, and similar raw materials purchased on account, $193,000. b. Film, costumes, and other raw materials used in production, $208,000 (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, $80,000 d. Depreciation recorded on the studio, cameras, and other equipment, $92,000. 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, $138,000 1. Costs for salaries and wages were incurred as follows: $ 90,000 Direct Labor (actors and director) Indirect labor (carpenters to build sets, contume designers, and so forth) Administrative salaries $120,000 $ 103,000 9. Prepaid Insurance expired during the year, $7,800 (75% related to production of videos, and 25% related to marketing and administrative activities) h. Miscellaneous marketing and administrative expenses incurred, 59,400. Studio (manufacturing) overhead was applied to videos in production. The company used 7,500 camera-hours during the year. J. Videos that COM $558,000 to produce according to their job cost sheets were transferred to the finished videos warehouse to swart sale and shipment k Sales for the year totaled $941,000 and were all on account. The total cost to produce these videos according to their job cost 1. Collections from customers during the your totaled $858,000 m. Payments to suppliers on account during the year. $508,000, payments to employees for salaries and wages. $293,000 Required: 1. Prepare o Taccount for each account on the company's balance sheet and onto the beginning balances 2. Record the transactions directly into the accounts, Key your entries to the letters (a) through 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 1 Prepare a T-account for each account on the company's balance sheet and enter the beginning balances. Record the transactions directly into the T- accounts. Cash Accounts Receivable 110,000 Beg. Bal 71.000 Beg Bat End. Bal 71.000 End Bal 110,000 Raw Materials Prepaid Insurance Beg Bal Gegal End. Bal End. Bal Videos in Process Finished Goods Bes Bal Beg Bal ED Find a Recumulated Depreciation BB End www Toro Next > Insurance Expense Advertising Expense Beg Bal Beg. Ball Miscellaneous Expense Administrative Salaries Expense Beg. Bat. Beg. Bal. End. Bail Cost of Goods Sold Sales Beg Bal Beg Bal End. Bal End, Bal Salates & Wages Payable Accounts Payable Beg Beg Bal End Endal Retained Earnings Capital Stock Bog Dal ED Endbal 1 of FH Next >