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 $ 63,000 Accounts receivable 102,000 Inventories: Raw materials (film, costumes) $ 30,000 Videos in process 45,000 Pinished videos awaiting sale 81,000 156,000 Prepaid insurance 9,000 Total current assets 330,000 Studio and equipment 730,000 Less accumulated depreciation 210.000 520,000 Total assets $850,000 Liabilities and Stockholders' Equity Accounts payable $160,000 Capital stock $420,000 Retained earnings 270.000 690,000 Total liabilities and stockholders' equity $850,000 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 $ d. 30,000 72,000 63,000 110,000 5,600 End. Bal 21,000 . g End. Bal. 9,400 Advertising Expense Beg. Bal. Insurance Expense 9,000 1,400 Beg. Bal. g e. 130,000 10,400 130,000 Miscellaneous Expense Beg. Bal. h. Beg. Bal. Administrative Salaries Expense 0 95,000 8,600 8,600 End. Bat. 95,000 Cost of Goods Sold Sales Beg Bal Beg. Bal k. 600,000 925,000 End. Bal. 600,000 End. Bal 925,000 Salaries & Wages Payable Beg. Bal. m. Beg. Bal m. 285,000 287,000 f. a. Accounts Payable 160,000 500,000 185,000 72,000 130,000 8,600 OO End. Bal. 2,000 e. h. End. Bal. 55,600 Retained Earnings 270,000 Capital Stock 420,000 Beg. Bal Beg. Bal. End. Bal. 270,000 End. Bal. 420,000 Rec > Req 1 and 2 Req3 Req 4 Req 5 Reg 6 Prepare a schedule of cost of goods manufactured. Supreme Videos, Inc. Schedule of Cost of Goods Manufactured Direct materials: Manufacturing overhead applied to work in process $ 30,000 Add: Ending raw materials inventory 185,000 Total raw materials available 215,000 Less: Ending raw materials inventory 15,000 Raw materials used in production 200,000 Add: Ending raw materials inventory 385,000 Direct labor Manufacturing overhead applied to work in process Total manufacturing costs Add: Beginning work in process inventory 82,000 290,000 372,000 45,000 417,000 37,000 380,000 Less: Ending work in process inventory Cost of goods manufactured $ Req 1 and 2 Req3 Req 4 Req 5 Req6 Prepare an income statement for the year. $ 925,000 (590,600) 334,400 Supreme Videos, Inc. Income Statement For the Year Ended December 31 Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense 130,000 Administrative salaries 95,000 Insurance expense 1,400 Depreciation expense 21,000 Miscellaneous expense 8,600 256,000 78,400 $ Accounts payable Accounts receivable
