Supreme Videos, Inc., produces short musical videos for sale to retail outlets. The companys balance sheet accounts as of January 1, are given below.

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 companys 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 occurred during the year:

a. Film, costumes, and similar raw materials purchased on account, $204,000.

b. Film, costumes, and other raw materials used in production, $219,000 (75% of this material was considered direct to the videos in production, and the other 25% was considered indirect).

c. Utility costs incurred on account in the production studio, $91,000.

d. Depreciation recorded on the studio, cameras, and other equipment, $103,000. 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, $149,000.

f. Costs for salaries and wages were incurred on account as follows:

g. Prepaid insurance expired during the year, $8,900 (70% related to production of videos, and 30% related to marketing and administrative activities).

h. Miscellaneous marketing and administrative expenses incurred on account, $10,500.

i. Studio (manufacturing) overhead was applied to videos in production. The company used 9,500 camera-hours during the year.

j. Videos that cost $569,000 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 $963,000 and were all on account. The total cost to produce these videos according to their job cost sheets was $619,000.

l. Collections from customers during the year totaled $869,000.

m. Payments to suppliers on account during the year, $519,000; payments to employees for salaries and wages, $326,000.

Required:

1. Prepare a T-account for each account on the companys 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?

4. Prepare a schedule of cost of goods manufactured.

5. Prepare a schedule of cost of goods sold.

Req 1 and 2: **

Far left and far right column of each T-account is the letter that corresponds with the statement. I.e. if $204,000 goes in, the corresponding letter that goes with is (a).

Req 3:

Answer options for first box: overapplied or underapplied

Req 4:

Direct Materials:

Answer options set #1

Answer options set #2

Total raw materials available

Answer options set #2

Raw materials used in production

Answer options set #2

Answer options set #1

Answer options set #1

Total manufacturing costs

Answer options set #2

Answer options set # 2

Answer options set #2

Cost of goods manufactured

Answer options set #1

Adjusted cost of goods sold

Beginning finished goods inventory

Beginning raw materials inventory

Cost of goods available for sale

Direct Labor

Ending raw materials inventory

Indirect Labor

Indirect Materials

Manufacturing overhead applied to work in process

Unadjusted cost of goods sold

Utilities, Factory

Work in process, beginning

Answer options set #2

Add: Beginning videos in process inventory

Add: Ending raw materials inventory

Add: Ending videos in process inventory

Add: Indirect materials

Add: Purchases of raw materials

Add: Work in process, beginning

Less: Beginning videos in process inventory

Less: Ending raw materials inventory

Less: Ending videos in process inventory

Less: Indirect materials

Less: Purchases of raw materials

Req 5:

Order of answer options on assignment:

Answer options set #1

Answer options set #2

Answer options set #3

Answer options set #2

Answer options set #3

Answer options set #2

Answer options set #3

Answer options set #1:

Answer options set #2:

Answer options set #3:

**on the req 1 and 2, I already put in a few numbers, but the only thing that is already put onto the T-accounts is the label beginning and ending balance, everything else I put in. (The numbers are probably not correct)

$ 82,000 121,000 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 $ 49,000 22,000 100,000 171,000 12,800 386,800 768,000 229,000 539,000 $925,800 Total assets $ 128,800 Liabilities and Stockholders' Equity Accounts payable Capital stock $ 508,000 Retained earnings 289,000 Total liabilities and stockholders' equity 797,000 $925,800 $ 101,000 Direct labor (actors and directors) Indirect labor (carpenters to build sets, costume designers, and so forth) Administrative salaries $ 129,000 $ 114,000 Req 1 and 2 Reg 3 Req 4 Reg 5 Prepare a T-account for each account on the company's balance sheet and enter the beginning balances. Record the transacti accounts. Cash Accounts Receivable 121,0001 Beg. Bal. 82,000 Beg. Bal. End. Bal. 82,000 End. Bal. 121,000 Raw Materials 49,000 Prepaid Insurance 12,800 Beg. Bal. Beg. Bal. a. 204,000 219,000 lb End. Bal. 34,000 End. Bal. 12,800 Videos in Process Finished Goods 100,000 Beg. Bal. Beg. Bal. b. 22,000 164,250 101,000 f. i. End. Bal. 100,000 End. Bal. 287,250 Studio and Equipment 768,000 Accumulated Depreciation 229,000 Beg. Bal. Beg. Bal. End. Bal. 229,000 End. Bal. 768,000 Studio Overhead Depreciation Expense Beg. Bal. Beg. Bal. End. Bal. End. Bal. Studio Overhead 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. Salaries & Wages Payable Accounts Payable 128,800 Beg. Bal. Beg. Bal. End. Bal. End. Bal. 128,800 Capital Stock Retained Earnings 289,000 Beg. Bal. Beg. Bal. End. Bal. 289,000 End. Bal. Req 1 and 2 Reg 3 Req 4 Reg 5 Is the Studio (manufacturing) Overhead account underapplied or overapplied for the year? Manufacturing overhead was by for the year. Req 1 and 2 Req 3 Req 4 Req 5 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 Total manufacturing costs 0 Cost of goods manufactured Req 1 and 2 Req3 Req 4 Req 5 Prepare a schedule of cost of goods sold. Supreme Videos, Inc. Schedule of Cost of Goods Sold Req 1 and 2 Reg 3 Req 4 Req 5 Prepare a schedule of cost of goods sold. Supreme Videos, Inc. Schedule of Cost of Goods Sold Beginning finished goods inventory Beginning raw materials inventory Beginning work in process inventory Ending finished goods inventory Req 4 Req 5 > Req 1 and 2 Reg 3 Reg 4 Reg 5 Prepare a schedule of cost of goods sold. Supreme Videos, Inc. Schedule of Cost of Goods Sold Beginning raw materials inventory Beginning work in process inventory Ending finished goods inventory Ending raw materials inventory Ending work in process inventory Req4 Req 5 ) Req 1 and 2 Req 3 Req 4 Req 5 Prepare a schedule of cost of goods sold. Supreme Videos, Inc. Schedule of Cost of Goods Sold Add: Cost of goods manufactured Add: Ending finished goods inventory Add: Overapplied overhead Add: Underapplied overhead 94 Req 1 and 2 Req3 Req 4 Req 5 Prepare a schedule of cost of goods sold. Supreme Videos, Inc. Schedule of Cost of Goods Sold Add: Underapplied overhead Less: Cost of goods manufactured Less: Ending finished goods inventory Less: Overapplied overhead Less: Underapplied overhead 194 Req 1 and 2 Reg 3 Req 4 Reg 5 Prepare a schedule of cost of goods sold. Supreme Videos, Inc. Schedule of Cost of Goods Sold Adjusted cost of goods sold Unadjusted cost of goods sold Cost of goods available for sale 94