Account for unearned income.
The TJ Company collects all service revenue in advance. The company showed a $12,500 liability on its December 31, 2011 balance sheet for unearned service. During 2012, customers paid $50,000 for future services, and the income statement for the year ended December 31, 2012 reported service revenue of $52,700.
What amount for the liability unearned service revenue will appear on the balance sheet at December 31, 2012? Can you please explain to me how to reach the correct answer?