Fundraising Opportunity

You are $in$ your second year $in$ the BCom program and came back home for the summer. $In$ past summers you have held 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 $of$ neighborhood 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 $a$ $$2,100$ 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 $isto$ pay $in$ cash $on$ May $1stto$ the Municipality for the booth permit $($$$420$ for the season, $1$ day $or4$ months same cost, $soitis$ expensed $in$ May$)$ and cleaning fees $(pay$ for a refundable deposit $of$ $$210$ that were returned $on$ August $31st$ because the booth received $no$ ticket from the municipality inspectors$).$

You were elated because the Library will allow your booth $to$ connect and use the Library utilities. Water, Drain, and Electricity connections, use and dismantle after the event had a cost $of$ $$525$ 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 makers, and a cash register for $$315$ per month. For the month $of$ May add $$210$ for a refundable deposit that will $be$ reimbursed after all the equipment has been returned and $in$ good shape $(reduce$ the rent payable $on$ Sep $5th).$ Rent $is$ due $on$ the fifth day $of$ the following month, but you pay $iton$ August $31stin$ cash stashed $in$ the deposit.

$On$ May $1st$ you ordered a Booth Tent that will last three summers $(12$ months$)$ for $$630$ and signage for the booth for $$210$ that $is$ immediately expensed, paid for both with your MasterCard whose balance will $be$ due $on$ July $2nd.$ A total $of$ $$1,575$ has been pre$-$ordered $on$ 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 $of50\%$ each are due $on$ May $15th$ and July $15th.$

$At$ General Drinks you ordered $on$ account a total $of105$ cases $of$ soft drinks per month, $tobe$ delivered $on$ the first $of$ each month, for $a$ $$3\mathrm{.}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 $of315$ units per month. You will pay $$1\mathrm{.}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 $goto$ the local supermarket $to$ purchase Coffee Creamer, Sugar and Milk, paying $$105$ 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 $of2$ people $in$ the booth $at$ any time.

When the month $of$ August was successful, everything was sold with only six full cases $of$ soft drinks left. Sales during the month were $$4,200,$ there was a donation jar that had $$1,260$ 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 $is$ $$2,940$ for cash, $$525$ for Coffee, cups and lids and $$2,352$ for retained earnings. The opening balance $of$ Beverages Inventory $is$ zero.

Required:

Prepare the opening balance $of$ cash $by$ August $31st.$

Prepare the Income Statement $(accrual$ basis$)$ for the Month $of$ August.

Prepare the Balance Sheet $(accrual$ basis$)asof$ August $31st.$