Please explain the steps to reach the answer. Thanks in advance! Garfield County
ID: 2572056 • Letter: P
Question
Please explain the steps to reach the answer. Thanks in advance!
Garfield County operates a solid waste landfill that is accounted for as an enterprise fund. At the end of 2013, the Landfill Enterprise Fund had a liability for landfill closure and postclosure care costs of $50,000. The county estimated the total costs associated with closing and monitoring the landfill as listed below. REQUIRED: Calculate current period expenses for year-ends 2015. 2014 2015 Costs Equipment to be installed $3.5 million $3.0 million Final cover $0.5 million $1.0 million Monitoring and maintaining $4.0 million $5.0 million Capacity used ***YTD info 30,000 58,000 Estimated total capacity 600,000 580,000
Explanation / Answer
Answer:
For calculating current period expenses for year-ends 2015. 2014 we need to calculate first Estimated total current cost
For 2014:
For 2015:
Equipment
$3.5 million
$3.0 million
Final cover
0.5 million
1.0 million
Monitoring
4.0 million
5.0 million
Estimated Total
$8.0 million
$9.0 million
Now we will calculate the current period expenses for year-ends 2015. 2014 as under
For 2014:
=($ 30,000/$600,000) x $8 million
= $400,000
current period expanses
= $400,000 - $50,000 previously recognized
= $350,000.
current period expenses for year-ends 2014 =$350,000
For 2015:
($ 58,000 /$580,000 )x $9 million
= $900,000
current period expanses
=$900,000 - $400,000 which is previously recognized
= $500,000.
current period expenses for year-ends 2015. =$500,000
For 2014:
For 2015:
Equipment
$3.5 million
$3.0 million
Final cover
0.5 million
1.0 million
Monitoring
4.0 million
5.0 million
Estimated Total
$8.0 million
$9.0 million