Question: On March 31, 2011, Dallas Co. received an advance payment of 60% of the sales price for special-order goods to be manufactured and delivered within

On March 31, 2011, Dallas Co. received an advance payment of 60% of the sales price for special-order goods to be manufactured and delivered within five months. At the same time, Dallas subcontracted for production of the special-order goods at a price equal to 40% of the main contract price. What liabilities should be reported in Dallas’

March 31, 2011 balance sheet?

Deferred revenues Payables to subcontractor

a. None None

b. 60% of main contract price 40% of main contract price

c. 60% of main contract price None

d. None 40% of main contract price

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