Advanced Accounting (Looseleaf)
12th Edition
ISBN: 9780077632595
Author: Hoyle
Publisher: MCG
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Textbook Question
Chapter 17, Problem 49P
A city has a solid waste landfill that was filled 12 percent in Year 1 and 26 percent in Year 2. During those periods, the government expected that total closure costs would be $2 million. As a result, it paid $50,000 to an environmental company on July 1 of each of these two years. Such payments will continue for several years to come. Indicate whether each of the following independent statements is Uric or false and briefly explain each answer. The city has a December 31 year-end.
- a. The government-wide financial statements will show a $230,000 expense in Year 2 but only if reported in an enterprise fund.
- b. The fund financial statements will show a $50,000 liability in Year 2 if this landfill is reported in the general fund.
- c. The fund financial statements will show-a $50,000 liability at the end of Year 2 if this landfill is reported in an enterprise fund.
- d. It this landfill is reported in an enterprise fund, the government-wide financial statements and the fund financial statements will basically have the same reporting.
- e. The government-wide financial statements will show a $420,000 liability at the end of Year 2.
- f. Over the landfill’s entire life, the amount of expense recognized in the government-wide financial statements will be the same as the amount of expenditures recognized in the fund financial statements. Assume the landfill is reported in the general fund.
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A city has a solid waste landfill that was filled 12 percent in Year 1 and 26 percent in Year 2. During those periods, the government expected that total closure costs would be $2 million. As a result, it paid $50,000 to an environmental company on July 1 of each of these two years. Such payments will continue for several years to come. The city has a December 31 year-end.Use the same information above except that, by the end of Year 3, the landfill is 40 percent filled. The city now realizes that the total closure costs will be $3 million. Indicate whether each of the following independent statements is true or false and briefly explain each answer.a. If the city had known the costs were going to be $3 million from the beginning, the reporting on the fund financial statements would have been different in the past years if the landfill had been reported in an enterprise fund.b. If the landfill is monitored in the general fund, a liability will be reported for the governmental…
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Chapter 17 Solutions
Advanced Accounting (Looseleaf)
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