Opening Balance of Cash Cash received: Paws Support Cash Advance Revenue Donations and returned deposits Cash disbursed: Booth Permit Cleaning Deposit Utilities Equipment Rental Equipment Rental Deposit Tent Depreciation Tent Signage Coffee, coffee cups and lids Beverages Baked Goods Coffee creamer, sugar, milk Ending Balance of Cash Amount pic 2 → D Amount Revenue Donations and returned deposits Expenses: Booth Permit Cleaning Deposit Utilities Equipment Rental Equipment Rental Deposit Tent Depreciation Tent Signage Coffee, coffee cups and lids Beverages Baked Goods Coffee creamer, sugar, milk Total Expenses 0.00 Net Income → Pic 3 Current Assets Cash Cash Advance Paws Support Booth Permit Cleaning Deposit Utilities Equipment Rental Equipment Rental Deposit Signage Coffee, coffee cups and lids Beverages Inventory Prepaid Beverages and Baked Goods Coffee creamer, sugar, milk Non current assets: Tent Accumulated Depreciation Tent Total assets Liabilities: Booth Permit Payable Utilities Payable Equipment Rental Payable Equipment Rental Deposit Payable Tent Payable Signage Payable D Amount Beverages Payable Coffee, coffee cups and lids payable Paws Support Cash Advance Total Liabilities 0.00 Retained earnings Total Liability plus Equity $ 0.00 0.00
Fundraising Opportunity You are in your second year in the BCom program at York University and came back home for the summer. In past summers you have hold several part time jobs. In your spare time, you are a very active fundraiser for Paws Support and their international missions. You had the fundraising idea of operating a booth to sell soft drinks, coffee, croissants, and other baked goods in the library park where all community events are held between May and August. They include all sorts of neighbourhood parties that showcase local street art dealers, performers, local shoppes and artists. You approached Paws Support with the idea and a week later you got the approval to create the booth and were given a $4,300 advancement to cover the start up costs. Once you got the funds on May 1st, planning started. Among the activities performed you got donations, permits, signage, tent, display cases, water, electrical connections and the municipal permit for the booth. One of the first steps is to pay in cash on May 1st to the Municipality for the booth permit (cost $860 for the season, 1 day or 4 months same cost, so it is expensed in May) and cleaning fees (pay for a refundable deposit of $430 that were returned on August 31st because the boot received no ticket from the municipality inspectors). You were elated because the Library will allow your booth to conect and use the Library utilities. Water, Drain, and Electricity connections, use and dismantle after the event had a cost of $1,075 per month paid in cash on the last day of each month, first payment on May 31st. This fee includes safe storage of the booth and equipment during week days. Next stop was at Equipment Rental to rent display cases, portable sink, warming oven, refrigerator, tables, two coffee markers, and a cash register for $645 per month. For the month of May add $430 for a refundable deposit that will be reimbursed after all the equipment has been returned in good shape (reduce the rent payable on Sep 5th). Rent is due on the fifth day of the following month, but you pay it on August 31st and cashed in the deposit. On May 1st you ordered a Booth Tent that will last three summers (12 months) for $1,290 and signage for the booth for $430 that is immediately expensed, paid for both with your MasterCard whose balance will be due on July 2nd. A total of $3,225 has been pre-order on May 1st for coffee, coffee cups, lids, and stir Stix. Delivery scheduled for May 10th, one third of the total purchase has been used in the month of August. Payment of 50% each are due on May 15th and July 15th. At General Drinks you ordered on account a total of 215 cases of soft drinks per month, to be delivered on the first of each month, for a $3.9 a case. Payment for the total of four months is due on June 30th. At the end of the month there were 6 cases in inventory. You spoke to the owner of the local bakery to source Croissants and other assorted baked goods to sell for the fundraiser. You agreed on daily deliveries on Fridays, Saturdays and Sundays for a total of 645 units per month. You will pay $1.0 for each item on the last day of the month. If demand is high, you will phone the bakery and more units will be delivered on site after 8pm for free. When needed you go to the local supermarket to purchase Coffee Creamer, Sugar and Milk, paying $215 cash during the month. All is used in the month. Every Friday morning you start setting everything up. You have been lucky to recruit other volunteers that will help you set up, manage and dismantle the booth every weekend. You got a schedule that guarantees a minimum of 2 people in the booth at any time. The events during August were successful, everything was sold with only six full cases of soft drinks left. Sales of items for the month was $8,600, there was a donation jar that had $2,580 which was deposited the last day of the month in the bank. The cash advance will be returned on September 10th together with the total funds raised in the summer. To solve the problem assume the opening balance for the month is $6,020 for cash, $1,075 for Coffee, coffee cups and lids and $4,816 for retained earnings. The opening balance of Beverages Inventory is zero.
Required:
Prepare the statement of proof of cash by August 31st. Prepare the Income Statement (accrual basis) for the Month of August. Prepare the Balance Sheet (accrual basis) as of August 31st.
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