Knowledge check 01 delta company performed $20,000 of services on account and recorded the amount due as a typical account receivable. over time, it became apparent that the customer would not be able to pay quickly, so delta required the customer to sign a six-month, 11 percent promissory note on february 1, year 2. the company then reclassified the existing account receivable as a note receivable. which of the following will result from this action? a. both assets and liabilities decreaseb. both assets and revenues decrease c. revenues decrease and liabilities increase d. no impact on the accounting equation

Harwood company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. the company's predetermined overhead rate of $2.50 per machine-hour was based on a cost formula that estimates $240,000 of total manufacturing overhead for an estimated activity level of 96,000 machine-hours. required: 1. assume that during the year the company works only 91,000 machine-hours and incurs the following costs in the manufacturing overhead and work in process accounts: compute the amount of overhead cost that would be applied to work in process for the year and make the entry in your t-accounts. 2a. compute the amount of underapplied or overapplied overhead for the year and show the balance in your manufacturing overhead t-account. 2b. prepare a journal entry to close the company's underapplied or overapplied overhead to cost of goods sold.