A city starts a solid waste landfill that it expects to fill to capacity gradually over a 20-year period. At the end of the first year, it is 11 percent filled. At the end of the second year, it is 25 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 financial statements?

MULTIPLE CHOICE

A. Expense will be $130,000 and liability will be $260,000.

B. Expense will be $140,000 and liability will be $250,000.

If this landfill is judged to be a proprietary fund, what liability will be reported at the end of the second year on fund financial statements?

MULTIPLE CHOICE

a. $140,000

b. $0

c. $ 260,000

d. $ 250,000

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?

MULTIPLE CHOICE

a. $0

b. $140,000

c. $260,000

d. $250,000