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Diano4ka-milaya [45]
3 years ago
13

A city starts a solid waste landfill that it expects to fill to capacity gradually over a 20-year period. At the end of the firs

t year, it is 11 percent filled. At the end of the second year, it is 25 percent filled. Currently, the cost of closure and postclosure is estimated at $1 million. None of this amount will be paid until the landfill has reached its capacity.
Which of the following is true for the Year 2 government-wide financial statements?
A. Expense will be $130,000 and liability will be $260,000.
B. Expense will be $140,000 and liability will be $250,000.
If this landfill is judged to be a proprietary fund, what liability will be reported at the end of the second year on fund financial statements?
a. $140,000
b. $0
c. $ 260,000
d. $ 250,000
If this landfill is judged to be a governmental fund, what liability will be reported at the end of the second year on fund financial statements?
a. $0
b. $140,000
c. $260,000
d. $250,000
Business
1 answer:
Zolol [24]3 years ago
5 0

Answer:

1- B. Expense will be $140,000 and liability will be $250,000

2- d. $250,000

3- d. $250,000

Explanation:

The expense will be $140,000 which is calculated by year 1 and year 2 percent filled. The calculation is as follows:

Year 2 liability : $1,000,000 * 25% = $250,000

Year 1 liability : $1,000,000 * 11% = $110,000

Year 2 expense = $140,000.

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