Question

A city starts a solid waste landfill during 2020. When the landfill was opened the city estimated that it would fill to capacity within 5 years and that the cost to cover the facility would be $1.5 million which will not be paid until the facility is closed. At the end of 2020 the facility was 20% full. A- Record the transaction if he landfill is viewed as an enterprise and on government-wide financial statements. B- Record the transaction if he landfill is viewed as a general fund and on fund financial statements.

Answer 1

Step-by-step explanation:

Solution:

a) At the end of 2020, facility is 20% full so the 300,000 would be regarded as expenses

Therefore, in the balance sheet, at the end of 2020, 300,000 would be shown as liability.

b) In the financial statements for 2012, 300,000 would be shown as expense and 300,000 would be shown as liability.