A City Starts a Solid Waste Landfill During 2010

Multiple Choice

A city starts a solid waste landfill during 2010. 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 2010, the facility was 20% full, and at the end of 2011 the facility was 45% full. On government-wide financial statements, which of the following are the appropriate amounts to present in the financial statements for 2011?

A) Both expense and liability will be zero
B) Expense will be $300,000 and liability will be $600,000.
C) Expense will be $600,000 and liability will be $600,000.
D) Expense will be $675,000 and liability will be $600,000.
E) Expense will be $375,000 and liability will be $675,000.