3: Southwest Airlines is paid in advance for its ticket sales, recognizing a deferred revenue, called air traffic liability, when it receives the cash. The liability is then converted to revenue when the passenger takes the flight. During 2012 Southwest recognized passenger revenue in the amount of $16.1 billion. On the balance sheet Southwest reported air traffic liabilities of $2.2 billion and $1.8 billion as of the end of 2012 and 2011 , respectively. a. Explain why Southwest does not recognize revenue when it receives the payment from its customers. b. Is air traffic liability a current or long-term liability? c. Compute the cash received by Southwest from passengers during 2012