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

January $1,$ are glven 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. Studlo $($manufacturing$)$ overhead is charged to videos on the basls of camera$-$hours of actlvity. The

company's predetermined overhead rate for the year is based on a cost formula that estrmated $$360,000$ in manufacturling overhead

for an estlmated allocation base of $9,000$ camera$-$hours. The following transactlons occurred durling the year:

a$.$ Film, costumes, and similar raw materlals purchased on account, $$190,000.$

b$.$ Fllm$,$ costumes, and other raw materlals used in production, $$205,000(85\%$ of this materlal 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.$

d$.$ Depreclation recorded on the studlo, cameras, and other equipment, $$89,000.$ Three$-$fourths of this depreclation related to

production of the videos, and the remainder related to equipment used in marketing and administration.

e$.$ Advertising expense Incurred on account, $$135,000.$

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

Direct labor $($actors and directors$)$

Indirect labor $($carpenters to build sets,

costume designers, and so forth$)$

Adninistrative salaries

g$.$ Prepaid insurance explred during the year, $$7,500(80\%$ related to production of videos, and $20\%$ related to marketing and

administratlve actliviles$).$

h$.$ Miscellaneous marketing and administratlve expenses incurred, $$9,100.$

Studio $($manufacturlng$)$ overhead was applied to videos in production. The company used $9,100$ camera$-$hours durlng the year.

J$.$ VIdeos that cost $$555,000$ to produce according to thelr job cost sheets were transferred to the finished videos warehouse to awalt

sale and shipment.

k$.$ Sales for the year totaled $$935,000$ and were all on account. The total cost to produce these vdeos according to thelr job cost

sheets was $$605,000.$

Collectlons from customers during the year totaled $$855,000.$

m$.$ Payments to suppliers on account during the year, $$505,000$; payments to employees for salarles and wages, $$290,000.$

Required:

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

Record the transactions directly Into the T$-$accounts. Key your entrles to the letters $($a$)$ through $($m$)$ above.

Is the Studio $($manufacturing$)$ Overhead account underappled or overapplied for the year? By how much?

Prepare a schedule of cost of goods manufactured.

$5.$ Prepare a schedule of cost of goods sold.

Prepare an Income statement for the year.