A city starts a solid waste landfill that it expects to fill to capacity gradually over a 12-year period. At the end of the first year, it is 7 percent filled. At the end of the second year, it is 17 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. 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. $100,000. b. $180,000. c. $170,000. d. $0.
A city starts a solid waste landfill that it expects to fill to capacity gradually over a 12-year period. At the end of the first year, it is 7 percent filled. At the end of the second year, it is 17 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. 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. $100,000. b. $180,000. c. $170,000. d. $0.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A city starts a solid waste landfill that it expects to fill to capacity gradually over a 12-year period. At the end of the first year, it is 7 percent filled. At the end of the second year, it is 17 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.
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. $100,000.
b. $180,000.
c. $170,000.
d. $0.
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