Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik

Exercise 61

A city starts a solid waste landfill that it expects to fill to capacity gradually over a 10-year period. At the end of the first year, it is 8 percent filled. At the end of the second year, it is 19 percent filled. Currently, the cost of closure and post closure is estimated at $I million. None of this amount will be paid until the landfill has reached its capacity.
If this landfill is judged to be a governmental fund, what liability will be reported at the end of the second year on fund financial statements
a. $-0-.
b. $110,000.
c. $190,000.
d. $200,000.