Question: You are a financial accountant with the Town of Willow

You are a financial accountant with the Town of Willow Creek, preparing for the upcoming year end of December 31, 2013.
(a) The balance recorded for the closure and post-closure liability associated with the town's landfill site needs to be updated. As the last comprehensive review of the site's capacity and the future costs associated with closure and post-closure maintenance was completed three years ago, you arranged for a consultant to complete a new study and the results are now in. Describe the approach you would take to updating the current liability. Consider the information that you would seek from the report and other sources, and explain the accounts that would be affected.
(b) The Commissioner of Finance has advised you that during the year, the province has approved the town's application to open a financial counseling service for individuals who are at risk of defaulting on their debts. Funding of $100,000 was received and deposited in the town's bank account last week. For each of the following situations, prepare the journal entry and describe how any portion that is not immediately recognized as revenue would be accounted for in future periods:
1. The province placed no stipulations on the use of the funds.
2. The Town's approved budget indicated that any grant received from the province would be dedicated to pay costs incurred to operate the service.
3. To receive the grant, the town had to agree to hire and apply the funds to pay the salary of a financial counselor.

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  • CreatedJune 09, 2015
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