Question

1. Lake Co. receives nonrefundable advance payments with special orders for containers constructed to customer specifications. Related information for 2009 is as follows ($ in millions):

Customer advances balance Dec 31, 2008 110
Advances received with 2009 orders 195
Advances applicable to orders in 2009 180
Advancs from orders canceled in 2009 45
What amount should Lake report as a current liability for advances from customers in its Dec. 31, 2009, balance sheet?
(Points : 4)
A. $0.
B. $80 .
C. $125.
D. $170.

Answer 1

$80

Step-by-step explanation:

This can be calculated as follows:

Lake Co.

Details $

Customer advances balance Dec 31, 2008 110

Advances received with 2009 orders 195

Advances applicable to orders in 2009 (180 )

Advances from orders canceled in 2009 (45)

Current liability for advances 80

Therefore, Lake should report $80 as a current liability for advances from customers in its Dec. 31, 2009, balance sheet.