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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: $ 78,000 117, eee Supreme Videos, Incorporated Balance Sheet January 1 Assets Current assets: Cash Accounts receivable Inventories: Raw materials (film, costumes) $ 45,000 Videos in process 23,000 Finished videos awaiting sale 96,000 Prepaid insurance Total current assets Studio and equipment 760, eee Less accumulated depreciation 225,000 Total asset: Liabilities and Stockholders' Equity Accounts payable Capital stock $504,888 Retained earnings 285,eee Total liabilities and stockholders' equity 164,000 12,000 371,800 535,000 $ 906,000 $ 117,00 789,000 $ 986,000 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 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 pdministration. e Advertising expense incurred on account, $145,000. noc were incurred as follows: 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. f. Costs for salaries and wages were incurred as follows: $ 97, eee Direct labor (actors and directors) Indirect labor (carpenters to build sets, costume designers, and so forth) Administrative salaries $ 125, eee $ 110, eee 9. 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. J. Videos that cost $565,000 to produce according to their job cost sheets were transferred to the finished videos warehouse to awalt 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. 1. 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 begihining balances. 2. Record the transactions directly into the T-accounts 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 Req 1 and 2 Reg 3 Reg 4 Reg 5 Req6 Prepare a T-account for each account on the company's balance sheet and enter the beginning balances. Record the transactions dire Cash Accounts Receivable Credit Credit Debit Beginning Balance Debit Beginning Balance Ending Balance Ending Balance Raw Materials Prepaid Insurance Credit Credit Debit Beginning Balance Debit Beginning Balance Ending Balance Ending Balance Videos in Process Finished Goods Credit Credit Debit Beginning Balance Debit Beginning Balance Ending Balance Ending Balance Studio and Equipment Credit Accumulated Depreciation Debit Beginning Balance Debit Beginning Balance Credit Ending Balance Ending Balance Studio Overhead Depreciation Expense Credit Credit Debit Beginning Balance Debit Beginning Balance Ending Balance Ending Balance 191 Studio Overhead Depreciation Expense Credit Credit Debit Beginning Balance Debit Beginning Balance Ending Balance Ending Balance Insurance Expense Advertising Expense Credit Credit Debit Beginning Balance Debit Beginning Balance Ending Balance Ending Balance Miscellaneous Expense Credit Debit Beginning Balance Administrative Salaries Expense Debit Credit Beginning Balance Ending Balance Ending Balance Cost of Goods Sold Sales Credit Creda Debit Beginning Balance Debat Beginning Balance Ending Balans Ending Balance Accounts Payable Salaries & Wages Payable Debit Beginning Balance Credit Creda Dei Beginning Balance Ending Balance Ending Balance Retained Earnings Capital Stock Credit Credit Detail Beginning Balance Dehit Beginning Balance Ending Balance Ending Balance Req 1 and 2 Reg 3 Reg 4 Req5 Reg 6 Is the Studio (manufacturing) Overhead account underapplied or overapplied for the year? By how much? Manufacturing overhead was for the year Req 1 and 2 Req3 Reg 4 Reqs Req 6 Prepare a schedule of cost of goods manufactured. Supreme Videos, Incorporated Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available Raw materials used in production Direct materials used in production Total manufacturing costs added to production Total manufacturing costs to account for Cost of goods manufactured Complete this question by entering your answers in the tabs below. Reg 1 and 2 Req3 Req4 Reg 5 Reg 6 Prepare a schedule of cost of goods sold. Supreme Videos Incorporated Schedule of Cost of Goods Sold Req 1 and 2 Reg 3 Req4 Reg 5 Reg 6 Prepare an income statement for the year. Supreme Videos, Incorporated Income Statement For the Year Ended December 31 Selling and administrative expenses:

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