Chapter 17

CHAPTER 17

50.

a. This statement is False because even if the landfill is reported as enterprise fund or general fund, the government-wide financial statements will be the same.

b. This statement is False because the liability will not require the use of current financial resources and therefore is not recorded at this time at the fund level.

c. This statement is False because a liability equal to 26 % of $2 million less the amount of cash paid should be reported by the Enterprise Fund.

d. This statement is True because the government-wide financial statements and the fund-based financial statements are reported the same in Enterprise Fund.

e. This statement is True because

Liability = 26 % of $2 million less the amount of cash paid

= $520,000 - $100,000 = $420,000.

f. This statement is True that the amount of expense recognized in the government-wide financial statements will be the same as the amount of expenditures recognized in the fund-based financial statements. Because in both the forms, the total expense/expenditure would be $2 million.

Communication Case 2

The Officer,

City of Larissa

MEMO

Regarding the recording of the landfill within the General Fund or a separate Enterprise Fund, I would like to point out the factors related to both funds that would help us in determining which fund to report the landfill.

If the city of Larissa requires a user fee for landfill, then the city can report the landfill operations within the enterprise funds. The city should report this landfill as a business-type activity (within an enterprise fund), it must recognize the closure and post closure costs in the government-wide statements based on accrual accounting and the economic resources measurement basis. The operation of a landfill eventually necessitates large payments to ensure that the facility is properly closed and then monitored and maintained for an extended period. (Page 723 of...