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 $ 78,000 117,000 $ 45,000 23,000 96,000 Supreme Videos, Inc. Balance Sheet January 1 Assets Current assets: Cash Accounts receivable Inventories: Raw materials (film, costumes) Videos in process Finished videos awaiting sale Prepaid insurance Total current assets Studio and equipment Less accumulated depreciation Total Liabilities and Stockholders' Equity Accounts payable Capital stock Retained earnings Total liabilities and stockholders' equity 164,000 12,000 371,000 760,000 225,000 535,000 3906,000 $504,000 285,000 $117,000 789,000 $906,00 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 $270 000 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, $200,000 b. Film, costumes, and other raw materials used in production, $215.000 (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, $87,000 d Depreciation recorded on the studio, cameras, and other equipment. $99.000 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. $145.000, 1 Costs for salaries and wages were incurred as follows. $ 97,800 Direct labor (actors and directors) Indirect labor (Carpenters to build sets, costume designers, and so forth) Administrative salaries $ 125,000 $ 110,000 g Prepaid insurance expired during the year, $8,500 (75% related to production of videos, and 25% related to marketing and administrative activities). h. Miscellaneous marketing and administrative expenses incurred $10,100 1. Studio (manufacturing) overhead was applied to videos in production. The company used 7,800 camera hours during the year 1. Videos that cost $565,000 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 $955.000 and were all on account. The total cost to produce these videos according to their job cost sheets was $615,000, Collections from customers during the year totaled $865,000 m. Payments to suppliers on account during the year. $515,000, payments to employees for salaries and wages, $322,000 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? 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 Prepare a T-account for each account on the company's balance sheet and enter the beginning balances. Record the accounts. Accounts Receivable Beg Bail Cash 78,000 865,000 Beg Bal 515 000 m 322000 106,000 End Bal End Bal Prepaid Insurance Beg Bal Raw Materials 45,000 215,000 200,000 Beg Bal 3 30,000 End. Bal End, Bal Finished Goods Beg Bal Beg Ba Videos in Process 23,000 172.000 565,000 97.000 351,000 End Bal End Bal 78,000 Accumulated Depreciation Studio and Equipment 760.000 Beg Bai Beg Bal End Bal End Bal 760,000 Studio Overhead Depreciation Expense Beg Bal Beg Bal b 351,000 C d 43.000 87.000 74,250 125,000 6375 End Bal 9 End Bal 15,375 Insurance Expense Advertising Expense | Beg Bal Beg Ball Miscellaneous Expense Administrative Salaries Expense Beg Ball Beg Bal End Bal Cost of Goods Sold Sales Beg. Bal Beg Bal End. Bal End Bal UOST OF Goods sold Beg Bal Sales Beg Bal End Bal End Bal Salaries & Wages Payable Beg Bal Accounts Payable Beg Bai End Bal End Bal Retained Earnings Beg Bal Capital Stock Beg Ball End Bal End Bal await sale and shipment k Sales for the year totaled $955.000 and were all on account. The total cost to produce these videos according to their sheets was $615,000. Collections from customers during the year totaled $865,000 m Payments to suppliers on account during the year, $515.000, payments to employees for salaries and wages $322,000 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 overopplied 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 Complete this questln by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Reg 5 Reg 6 Is the Studio (manufacturing) Overhead account underapplied or overapplied for the year? By how much? Manufacturing overhead was by for the year Req 1 and 2 Req3 Reg 4 Reg 5 Reg 6 Prepare a schedule of cost of goods manufactured. Supreme Videos, Inc. Schedule of Cost of Goods Manufactured Direct materials Total raw materials available Raw materials used in production Direct matenals used in production Total manufacturing costs added to production Total manufacturing costs to account for O Cost of goods manufactured Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Req 5 Reg 6 Prepare a schedule of cost of goods sold. Supreme Videos, Inc. Schedule of Cost of Goods Sold (Reg 4 Req6 > Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Req 4 Req 5 A Req6 Prepare an income statement for the year. Supreme Videos, Inc. Income Statement For the Year Ended December 31 0 Selling and administrative expenses $ 0