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A city opens a solid waste landfill that it expects to fill to capacity gradually over a $38-$year period. At the end of the first year, it is $14$ percent filled. At the end of the second year, it is $31$ 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 $90$ percent of its capacity.

Which of the following is true for the Year $2$ government$-$wide financial statements?

Multiple Choice

Both expense and liability will be zero.

Expense will be $$160,000$ and liability will be $$320,000.$

Expense will be $$170,000$ and liability will be $$310,000.$

Both expense and liability will be $$170,000.$