Karen is in her third year in the BCom program at York University and is a very active fundraiser for the Canadian Cancer Society (CCS) in Toronto working in different events.

She has been approved to manage a drive-in movie night in the context of COVID-19 and to execute the initiative CCS gave $5,600as an advancement to cover the costs of the event.

Once she got the approval she started to plan, and the first big challenge was to secure a drive-in cinema. Fortunately, a drive-in cinema was on board and donated its use on a Saturday morning; however, the out-of-pocket costs to operate the drive-in cinema are to be paid by Karen. Before the event she got an invoice for $1,200 from the cinema to cover for out-of-pocket costs to pay their employees that will run the drive-in cinema on the event day. She paid the $1,200 plus another $1,000 as an advancement for other costs that will be billed after the event, once they are known (such as utilities and cleaning services). If the costs are less than the advanced payment of $1,000 Karen will be reimbursed.

It was decided that every participant will be charged $25 per car to attend the event. The maximum capacity of the drive-in is 103 cars, so Karen decided to run two shows on the same day: the first starting at 8am and the second starting at 11am.

Karen will use the tent and display that was purchased earlier in the year by CCS and is expected to last for 10 events. CCS passed the ownership of the tent and displays to Karen through a sale in cash for $500. At the end of the event, Karen can sell it back to CCS for $450 or keep it for future events. Karen decided to keep it as she had no shortage of great ideas for fundraising. She also ordered and received a set of signs that will be placed in the road to guide drivers to the drive-in. Those signs are specific for the drive-in event, their costs of $80 is on account and will be disposed of after the event.

Each attendee would receive a sealed bag containing pop cans, chips and a chocolate bar. She ordered on account 70 cases of twelve healthy and nutritive soft drinks each for $6.00 a case plus a $1.50 per case deposit. She also purchased 850 bags of organic chips at $1.00 each and when placing the order for 850 bars of responsible sourced chocolate she explained it was for a fundraising event. The owner of the shop said that if she pays the $1,700 in cash for chips and chocolate bars, they will donate 210 zip bags needed to hold each package to be handed out to attendees (each package consists of 4 pop cans, 4 chips and 4 chocolate bars). Karen accepted immediately and paid the full amount in cash, the owner was so happy that told her "if there is something left, not used, please return them and I will buy them back at the same price you've paid today".

Thanks to the hard work of several volunteers all bags to give away were sealed one week prior to the event. As a token of appreciation, Karen gave a few chips and chocolate bars to the volunteers. On the day of the event she paid a truck company $243 to move all bags to the drive-in cinema. Unfortunately, few bags were broken, and its content contaminated not making them suitable to distribute or return. Fortunately, some of the attended preferred not to receive the bag and asked that gesture to be taken as a donation.

The event was very successful. A total of 63 cars attended the 8am event and it was full for the 11am event. Everything was distributed with only a few bags left, Karen decided to open 2 bags so volunteers can enjoy their content and the other 14 bags each with 4 pops, 4 chips and 4 chocolate bars will be taken back for a full refund. Karen was also happy because the drive-in cinema reported that in one week, they will refund $235 of the $1,000 she provided as deposit.

There was a donation jar that had $532 which was deposited Sunday night in the bank.

Karen was very happy when her contact at CCS shared the charts of accounts she is required to use to account for the fundraising and report back to CCS. Her contact went a step further and tailored most of the accounts to Karen's event as follows:

Current AssetsCurrent liabilities

CashAdvances from CCS

Prepaid Drive-in Cinema ExpensesSigns Payable

Soft DrinksLoan Payable

Deposits on Soft DrinksAccounts Payable

ChipsSalaries Payable

Chocolate

Non-Current AssetsEquity

Tent and DisplaysPaid in Capital

Accumulated Depreciation - Tent and DisplaysRetained Earnings

ExpensesRevenue

Drive-in Cinema ExpensesChips ExpensesRevenue

Transportation ExpensesSigns ExpensesSales returns and allowances

Soft Drinks ExpensesChocolate ExpensesDonations

Insurance ExpensesInterest Expenses

Depreciation Expense - Tent and Displays

Required:

a proof of cash

an accrual Income Statement

an accrual Balance Sheet