On April 1,2012,Guyton Sails accepted a $12,000 advance payment for maintaining a customer's fleet of sail boats.The contract is for a twelve month period.In May 2012,the company performed $1,200 worth of repairs.What is the remaining liability that would appear on the company's balance sheet at the end of May?

Question

Quizplus · Accepted Answer

The company has performed $1,200 worth of repairs, so the remaining liability is $12,000 - $1,200 = $10,800.

On April 1,2012,Guyton Sails Accepted a $12,000 Advance Payment for Maintaining