Reconciliations to yield government-wide financial statements (landfill closure liability) The City of Captiva is preparing its government-wide financial statements from its fund financial statements. The City maintains a landfill for solid waste disposal and estimates that its total capacity is 11.5 million tons. At the end of the prior year, the City estimated that it had used 4.5 million tons and reported a liability for closure and postclosure costs of $4.5 million. During the year, the City estimates that it used an additional 2,000,000 tons of capacity. Closure and postclosure costs are expected to be $11.5 million when the Landfill reaches capacity. a. Calculate the current period cost. Current period cost = $ 4,500,000 b. What reconciliation entries must the City include in its government-wide financial statements relating to the Landfill Liability at the beginning of the year and as of the end of the year? Net position Reconciliation Spreadsheet Description 수 + Landfillliability To record BOY landfill liability for government-wide financial statement presentation Landfill expense Landfillliability To record landfill liability activity for government-wide financial statement presentation + Debit 4,500,000 ✓ ✓ 2,000,000 ✓ Credit 0 4,500,000 0✓ 2,000,000
Reconciliations to yield government-wide financial statements (landfill closure liability) The City of Captiva is preparing its government-wide financial statements from its fund financial statements. The City maintains a landfill for solid waste disposal and estimates that its total capacity is 11.5 million tons. At the end of the prior year, the City estimated that it had used 4.5 million tons and reported a liability for closure and postclosure costs of $4.5 million. During the year, the City estimates that it used an additional 2,000,000 tons of capacity. Closure and postclosure costs are expected to be $11.5 million when the Landfill reaches capacity. a. Calculate the current period cost. Current period cost = $ 4,500,000 b. What reconciliation entries must the City include in its government-wide financial statements relating to the Landfill Liability at the beginning of the year and as of the end of the year? Net position Reconciliation Spreadsheet Description 수 + Landfillliability To record BOY landfill liability for government-wide financial statement presentation Landfill expense Landfillliability To record landfill liability activity for government-wide financial statement presentation + Debit 4,500,000 ✓ ✓ 2,000,000 ✓ Credit 0 4,500,000 0✓ 2,000,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject : Accounting
Transcribed Image Text:Reconciliations to yield government-wide financial statements (landfill closure liability)
The City of Captiva is preparing its government-wide financial statements from its fund financial statements.
The City maintains a landfill for solid waste disposal and estimates that its total capacity is 11.5 million tons. At the end of the prior year, the City estimated
that it had used 4.5 million tons and reported a liability for closure and postclosure costs of $4.5 million. During the year, the City estimates that it used an
additional 2,000,000 tons of capacity. Closure and postclosure costs are expected to be $11.5 million when the Landfill reaches capacity.
a. Calculate the current period cost.
Current period cost = $ 4,500,000
x
b. What reconciliation entries must the City include in its government-wide financial statements relating to the Landfill Liability at the beginning of the year and
as of the end of the year?
Net position
Reconciliation Spreadsheet
Description
+
Landfillliability
To record BOY landfill liability for government-wide financial statement presentation
Landfill expense
Landfillliability
To record landfill liability activity for government-wide financial statement presentation
+
+
Debit
4,500,000 ✓
0
2,000,000 ✓
Credit
0
4,500,000
2,000,000 ✓
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