Question

In: Accounting

On January 1, 2017, the City of Hastings created a solid waste landfill that it expects...

On January 1, 2017, the City of Hastings created a solid waste landfill that it expects to reach capacity gradually over the next 20 years. If the landfill were to be closed at the current time, closure costs would be approximately $1.50 million plus an additional $810,000 for postclosure work. Of these totals, the city must pay $58,000 on December 31 of each year for preliminary closure work. At the end of 2017, the landfill reached 2 percent of capacity. At the end of 2018, the landfill reached 12 percent of capacity. Also at the end of 2018, a reassessment is made; total closure costs are determined to be $1.70 million rather than $1.50 million. Assuming that the landfill is viewed as an enterprise fund, what journal entries are made in 2017 and 2018 on the government-wide financial statements? Assuming that the landfill is reported within the general fund, what journal entries are made in 2017 and 2018 on the government-wide financial statements? Assuming that the landfill is viewed as an enterprise fund, what journal entries are made in 2017 and 2018 on fund financial statements? Assuming that the landfill is reported within the general fund, what journal entries are made in 2017 and 2018 on fund financial statements?

Solutions

Expert Solution

Answer

a)   Assuming that the landfill is viewed as an enterprise Fund, Journal Entries for the year 2017 and 2018 on the basis of government- wide financial statements are as follows:-

Date Particulars Debit Credit
12/31/2017 (Ist year total costs)
Expense - Landfill Closure 46200(WN1)
             Landfill closure liability 46200
(To record Ist year total costs)
Landfill closure liability 58000 (WN3)
Cash 58000
12/31/2018 (2nd Year Total Costs)
Expense - Landfill Closure 255000 (WN2)
             Landfill closure liability
255000
(To record 2nd year total costs)
Landfill Closure Liability 58000 (WN3)
Cash 58000

(b) Assuming that the landfill is reported within the general fund, what journal entries are made in 2017 and 2018 on the government-wide financial statements

Date Particulars Debit Credit
12/31/2017 (Ist year total costs)
Expense - Landfill Closure 46200(WN1)
             Landfill closure liability 46200
(To record Ist year total costs)
Landfill closure liability 58000 (WN3)
Cash 58000
12/31/2018 (2nd Year Total Costs)
Expense - Landfill Closure 255000 (WN2)
             Landfill closure liability
255000
(To record 2nd year total costs)
Landfill Closure Liability 58000 (WN3)
Cash 58000

(c) Assuming that the landfill is viewed as an enterprise fund, what journal entries are made in 2017 and 2018 on fund financial statements?

Date Particulars Debit Credit
12/31/2017 (Ist year total costs)
Expense - Landfill Closure 46200(WN1)
             Landfill closure liability 46200
(To record Ist year total costs)
Landfill closure liability 58000 (WN3)
Cash 58000
12/31/2018 (2nd Year Total Costs)
Expense - Landfill Closure 255000 (WN2)
             Landfill closure liability
255000
(To record 2nd year total costs)
Landfill Closure Liability 58000 (WN3)
Cash 58000

d) Assuming that the landfill is reported within the general fund, what journal entries are made in 2017 and 2018 on fund financial statements?

Date Particulars Debit ($) Credit ($)   
12/31/2017 (To record 1st Year Annual Payments)
Expenditures - Landfill Closure 58000
             Landfill closure liability
58000
12/31/2018
(To record 2nd year Annual Payments)
Expenditure - LandFill Closure 58000
Cash 58000

Working Note:-
1) Expense- Landfill Closure for 31st Dec, 2017 = 2% of Cost of Landfill in 2017 plus Additional costs after post closure)

= 2% of (1.50 + 0.81) millions

= $ 46200

2) Expense- Landfill Closure for 31st Dec, 2018 = 12% of the cost of the landfill in 2018 + Additional costs after post closure - 2017 expense costs.

= (12% of (1.70+ 0.81))- 0.0462 millions

= $ 255000

3) Since there is no other annual cost related to the work expect for $ 58000 each year, we show these as expenditures on accounting records.

4) Government - wide Financial Statements

Accounted for as an Enterprise Fund (Within the business- type activities)

In case you need any more clarifications or any furthur explanations do comment and let me know. If you are satisfied with the answer do leave a thumbs up. Thanks!


Related Solutions

On January 1, 2017, the City of Hastings created a solid waste landfill that it expects...
On January 1, 2017, the City of Hastings created a solid waste landfill that it expects to reach capacity gradually over the next 20 years. If the landfill were to be closed at the current time, closure costs would be approximately $1.50 million plus an additional $810,000 for postclosure work. Of these totals, the city must pay $58,000 on December 31 of each year for preliminary closure work. At the end of 2017, the landfill reached 2 percent of capacity....
A city starts a solid waste landfill that it expects to fill to capacity gradually over...
A city starts a solid waste landfill that it expects to fill to capacity gradually over a 21-year period. At the end of the first year, it is 13 percent filled. At the end of the second year, it is 29 percent filled. Currently, the cost of closure and postclosure is estimated at $1 million. None of this amount will be paid until the landfill has reached its capacity. Which of the following is true for the Year 2 government-wide...
A city starts a solid waste landfill that it expects to fill to capacity gradually over...
A city starts a solid waste landfill that it expects to fill to capacity gradually over a 21-year period. At the end of the first year, it is 13 percent filled. At the end of the second year, it is 29 percent filled. Currently, the cost of closure and postclosure is estimated at $1 million. None of this amount will be paid until the landfill has reached its capacity. If this landfill is judged to be a proprietary fund, what...
Brown County operates a solid waste landfill for the citizens of the county. The following events...
Brown County operates a solid waste landfill for the citizens of the county. The following events occurred during the county’s fiscal year ended September 30. The county paid interest costs of $6,879,000; of this amount, $222,000 was required to be capitalized to construction work in progress. Amortization of bond premiums was $173,400. The county is self-insured through an internal service fund for workers’ compensation, automotive, and general liability insurance. The Solid Waste Enterprise Fund participates in the county-run program, and...
Design a solid waste landfill that will maximize the amount of methane gas produced. In depth...
Design a solid waste landfill that will maximize the amount of methane gas produced. In depth explanation of parts please!
The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to...
The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to households and businesses. Until recently, Evergreen had an exclusive franchise to provide this service in Imperial Falls, which meant that other waste collection firms could not operate legally in the city. The price per pound of waste collected was regulated at 25 percent above the average total cost of collection. Cost data for the most recent year of operations for Evergreen are as follows....
The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to...
The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to households and businesses. Until recently, Evergreen had an exclusive franchise to provide this service in Imperial Falls, which meant that other waste collection firms could not operate legally in the city. The price per pound of waste collected was regulated at 20 percent above the average total cost of collection. Cost data for the most recent year of operations for Evergreen are as follows....
The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to...
The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to households and businesses. Until recently, Evergreen had an exclusive franchise to provide this service in Imperial Falls, which meant that other waste collection firms could not operate legally in the city. The price per pound of waste collected was regulated at 20 percent above the average total cost of collection. Cost data for the most recent year of operations for Evergreen are as follows....
The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to...
The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to households and businesses. Until recently, Evergreen had an exclusive franchise to provide this service in Imperial Falls, which meant that other waste collection firms could not operate legally in the city. The price per pound of waste collected was regulated at 20 percent above the average total cost of collection. Cost data for the most recent year of operations for Evergreen are as follows:...
The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to...
The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to households and businesses. Until recently, Evergreen had an exclusive franchise to provide this service in Imperial Falls, which meant that other waste collection firms could not operate legally in the city. The price per pound of waste collected was regulated at 20 percent above the average total cost of collection. Cost data for the most recent year of operations for Evergreen are as follows....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT