A city starts a solid waste landfill during 2020. When the landfill was opened the city estimated that it would fill to capacity within 6 years and that the cost to cover the facility would be $1.8 million which will not be paid until the facility is closed. At the end of 2020, the facility was 15% full, and at the end of 2021 the facility was 35% full.If the landfill is judged to be a governmental fund, what liability is reported on the fund financial statements at the end of 2021?
A) $0.
B) $270,000.
C) $360,000.
D) $540,000.
E) $630,000.

Question

Quizplus · Accepted Answer

In governmental fund accounting, liabilities are recognized when they are due and payable. Since the cost to cover the landfill will not be paid until the facility is closed, no liability is reported in the fund financial statements at the end of 2021.

A City Starts a Solid Waste Landfill During 2020