Black Co. requires advance payments with special orders for machinery constructed to customer specifications. These advances are nonrefundable. Information for 2006 is as follows:
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Customer advances—balance 12/31/05 |
$118,000 |
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Advances received with orders in 2006 |
184,000 |
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Advances applied to orders shipped in 2006 |
164,000 |
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Advances applicable to orders cancelled in 2006 |
50,000 |
In Black’s December 31, 2006 balance sheet, what amount should be reported as a current liability for advances from customer?
- $0
- $ 88,000
- $138,000
- $148,000