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.

$80

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.

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