Altona City opened a landfill that it elects to account for in an enterprise fund. At the time the landfill was opened the government estimated total capacity of the landfill to be 5 million cubic feet, useful life to be 20 years, and total closure and postclosure costs to be $18 million. At the end of Year 1, the government reestimated total closure costs to be $18.3 million and estimated capacity to be same as the original estimate. At the end of Year 2, the government reestimated total capacity to be 4.8 million cubic feet and total closure costs to be $18.5 million. At the end of Year 3, the government reestimated useful life to be 17 years but capacity remained unchanged from the preceding year and closure and postclosure costs were estimated to be $18.4 million. REQUIRED: Prepare journal entries in the enterprise fund to record the following events. a)During Year 1, the city estimates that 300,000 cubic feet of capacity were used. Record the landfill expense. b)During Year 2, the city estimates that 650,000 cubic feet of capacity were used. Record the landfill expense. c)During Year 3 the city installed equipment at a cost of $130,000. The equipment will be used in monitoring the landfill when it is closed. d)During Year 3 the city estimates that 1,050,000 cubic feet of capacity were used. Record the landfill expense.
Altona City opened a landfill that it elects to account for in an enterprise fund. At the time the landfill was opened the government estimated total capacity of the landfill to be 5 million cubic feet, useful life to be 20 years, and total closure and postclosure costs to be $18 million. At the end of Year 1, the government reestimated total closure costs to be $18.3 million and estimated capacity to be same as the original estimate. At the end of Year 2, the government reestimated total capacity to be 4.8 million cubic feet and total closure costs to be $18.5 million. At the end of Year 3, the government reestimated useful life to be 17 years but capacity remained unchanged from the preceding year and closure and postclosure costs were estimated to be $18.4 million. REQUIRED: Prepare journal entries in the enterprise fund to record the following events. a)During Year 1, the city estimates that 300,000 cubic feet of capacity were used. Record the landfill expense. b)During Year 2, the city estimates that 650,000 cubic feet of capacity were used. Record the landfill expense. c)During Year 3 the city installed equipment at a cost of $130,000. The equipment will be used in monitoring the landfill when it is closed. d)During Year 3 the city estimates that 1,050,000 cubic feet of capacity were used. Record the landfill expense.
Chapter7: Corporations: Reorganizations
Section: Chapter Questions
Problem 30P
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- Altona City opened a landfill that it elects to account for in an enterprise fund.
- At the time the landfill was opened the government estimated total capacity of the landfill to be 5 million cubic feet, useful life to be 20 years, and total closure and postclosure costs to be $18 million.
- At the end of Year 1, the government reestimated total closure costs to be $18.3 million and estimated capacity to be same as the original estimate.
- At the end of Year 2, the government reestimated total capacity to be 4.8 million cubic feet and total closure costs to be $18.5 million.
- At the end of Year 3, the government reestimated useful life to be 17 years but capacity remained unchanged from the preceding year and closure and postclosure costs were estimated to be $18.4 million.
REQUIRED: Prepare
- a)During Year 1, the city estimates that 300,000 cubic feet of capacity were used. Record the landfill expense.
- b)During Year 2, the city estimates that 650,000 cubic feet of capacity were used. Record the landfill expense.
- c)During Year 3 the city installed equipment at a cost of $130,000. The equipment will be used in monitoring the landfill when it is closed.
- d)During Year 3 the city estimates that 1,050,000 cubic feet of capacity were used. Record the landfill expense.
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