Supreme Videos, Incorporated, produces short musical videos for sale to retail outlets. The company's balance sheet accounts as of

January $1$ are given below.

Because the videos differ in length and 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 based on camera$-$hours of activity. The company's

predetermined overhead rate for the year is based on a cost formula that estimated $$240,000$ 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, $$205,000$

b$.$ Film, costumes, and other raw materials used in production, of this material was direct to the videos in production,

and the other $20\%$ was indirect$)$

c$.$ Utility costs incurred in the production studio, $$92,000$

d$.$ Depreciation on the studio, cameras, and other equipment, $$104,000.$ 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, $$150,000.$

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

g$.$ Prepaid insurance expired during the year, $$9,000(75\%$ related to production of videos, and $25\%$ related to marketing and

administrative activities$)$

h$.$ Miscellaneous marketing and administrative expenses incurred, $$10,600.$

i$.$ Studio $($manufacturing$)$ overhead was applied to videos in production. The company used $9,000$ camera$-$hours during the year.

j$.$ Videos that cost $$570,000$ to produce were transferred to the finished videos warehouse.

k$.$ Sales for the year totaled $$965,000$ and were all on account. The total cost to produce these videos was $$620,000.$

I. Collections from customers during the year totaled $$870,000.$

$m.$ Payments to suppliers on account during the year, $$520,000$; payments to employees for salaries and wages, $$327,000.$

Required:

Prepare a T$-$account for each account on the company's balance sheet and enter the beginning balances.

Record the transactions in the T$-$accounts. Key your entries to the letters $($a$)$ through $(m)$ above.

Is the Studio $($manufacturing$)$ Overhead account underapplied or overapplied? By how much?

Prepare a schedule of cost of goods manufactured.

Prepare a schedule of cost of goods sold.

Prepare an income statement.

Complete this question by entering your answers in the tabs below.

Prepare a T$-$account for each account on the company's balance sheet and enter the beginning balances. Record the transactions in the T$-$accounts.