A reversing entry is made when a company sustains a loss in one period and reverses the effect with a profit in the next period. reverses entries that were made in error. is made when a business disposes of an asset it previously purchased. is the exact opposite of an adjusting entry made in a previous period.

Warner inc. sells a high-speed retrieval system for mining information. it provides the following information for the year. budgeted actual overhead cost $965,700 $905,000 machine hours 58,570 49,200 direct labor hours 107,300 104,200 overhead is applied on the basis of direct labor hours. compute the predetermined overhead rate. predetermined overhead rate $ per direct labor hour link to text determine the amount of overhead applied for the year. the amount of overhead applied $