Use the Following Information to Questions

Multiple Choice

Use the following information to Questions
Lincoln City has a 6/30 fiscal year-end.The City has a policy of recognizing revenues/ expenditures when collected/paid or if expected to be collected/paid within 60 days of year-end.
The City has a sick leave benefit policy for its employees.The policy allows City employees one day of paid sick leave per month and permits them to accumulate sick leave they do not take.Sick leave vests at the completion of the fifth year of employment, and unused sick leave is paid in cash upon termination or retirement.During the fiscal year ended 6/30/11, City employees who are paid from the General Fund, earned $2.8 million of sick leave, of which $1.0 was taken.Of the balance, the City estimates $.2 million will be taken in the next sixty days, $.6 million will be taken in the next five years, $.4 million will vest, and $.6 million will never be taken.
-The amount of sick pay liability that should appear on the government-wide financial statements at 6/30/11 is

A) $.1.2 million.
B) $.4 million.
C) $.2 million.
D) No liability should appear.