Supreme Videos, Inc., produces short musical videos for sale to retail outlets. The company's balance sheet accounts as of January 1, the beginning of its fiscal year, are given below: Supreme Videos, Inc. Balance Sheet January 1 Assets Current assets: Cash $68,000 Accounts receivable 107,000 Inventories: Raw materials (film, costumes) $35,000 Videos in process 25,000 Finished videos awaiting sale 86,000 146,000 Prepaid insurance 10,000 331,000 Total current assets Studio and equipment Less accumulated depreciation 740,000 215,000 525,000 Total assets $856,000 Liabilities and Stockholders' Equity $156,000 Accounts payable Capital stock Retained earnings $425,000 275,000 700,000 Total liabilities and stockholders' equity $856,000 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 were recorded for the year. a. Film, costumes, and similar raw materials purchased on account, $190,000 b. Film, costumes, and other raw materials issued to production, $205,000 (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, $77,000 for account. d. Depreciation recorded on the studio, cameras, and other equipment, $89,000. Three-fourths of this depreciation related to actual production of the videos, and the remainder related to equipment used in marketing and administration. e. Advertising expense incurred, $135,000 for account. f. Costs for salaries and wages were incurred as follows: $ 87,000 Direct labor (actors and directors) Indirect labor (carpenters to build sets, costume designers, and so forth) Administrative salaries $ 115,000 $100,000 g. Prepaid insurance expired during the year, $7,500 (80% related to production of videos, and 20% related to marketing and administrative activities). h. Miscellaneous marketing and administrative expenses incurred, 59,100 for account. i. Studio (manufacturing) overhead was applied to videos in production. The company recorded 9,100 camera-hours of activity during the year. j. Videos that cost $555,000 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 $935,000 and were all on account. The total cost to produce these videos according to their job cost sheets was $605,000. 1. Collections from customers during the year totaled $855,000. m.Payments to suppliers on account during the year, $505,000; payments to employees for salaries and wages, $290,000 Required: 1&2. Prepare a T-account for each account on the company's balance sheet, and enter the beginning balances. Make an entry directly into the T-accounts for transactions (a) through (m). Required: 182. Prepare a T-account for each account on the company's balance sheet, and enter the beginning balances. Make an entry directly into the T-accounts for transactions (a) through (m). 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. End. Bal. End. Bal. Studio Overhead Depreciation Expense End. Bal. End. Bal. Insurance Expense Advertising Expense End. Bal. End. Bal. Miscellaneous Expense Administrative Salaries Expense End. Bal End. Bal. Sales Cost of Goods Sold End. Bal. End. Bal. Accounts Payable Salaries & Wages Payable Beg. Bal. End. Bal. End. Bal. Capital Stock Retained Earnings Beg. Bal Beg. Bal End. Bal. End. Bal. 3. Is the Studio (manufacturing) Overhead account underapplied or overapplied for the year? By how much? Manufacturing overhead by for the year was 4. Prepare an income statement for the year. SUPREME VIDEOS, INC. Income Statement For the Year Ended December 31 Selling and administrative expenses