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 $1,300 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 $260 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 $130 that will be returned on August 31st if the boot receives 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 $325 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 $195 per month. For the month of May add $130 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 (May payment and the deposit are due on June 5th).
On May 1st you ordered a Booth Tent that will last three summers (12 months) for $390 and signage for the booth for $130 that is immediately expensed, paid for both with your MasterCard whose balance will be due on July 2nd. A total of $975 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 July. Payment of 50% each are due on May 15th and July 15th.
At General Drinks you ordered on account a total of 65 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 195 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 $65 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 July were successful, everything was sold with only six full cases of soft drinks left. Sales of items for the month was $2,600, there was a donation jar that had $780 which was deposited at month end 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 $1,820 for cash, $585 for Coffee, coffee cups and lids and $994.50 for retained earnings. The opening balance of Beverages Inventory is zero.
Required:
In the bustling community of York University, where the summer months are marked by an array of vibrant events, a BCom student, passionate about raising funds for Paws Support and their international missions, embarked on an entrepreneurial endeavor. Operating a booth in the library park, the student set out to sell soft drinks, coffee, croissants, and other baked goods to raise money for a noble cause. This essay provides a comprehensive financial overview of this fundraising venture, including a Statement of Proof of Cash, an Income Statement on an accrual basis, and a Balance Sheet as of July 31st.
At the heart of this summer fundraising initiative is the prudent management of cash flow. As of July 1st, the student began with an opening cash balance of $1,820. Additionally, there were balances for Coffee, Coffee Cups, and Lids ($585) and Retained Earnings ($994.50).
Throughout the month of July, the booth received cash receipts, including $2,600 from sales and $780 in generous donations. On the disbursement side, expenses included equipment rental, municipality permit and cleaning fees, utility connection fees, coffee-related purchases, soft drinks for the season, baked goods, and supermarket supplies.
Upon calculating all cash receipts and disbursements, the ending cash balance as of July 31st amounted to $1,581.
The Income Statement for the month of July showcases the financial performance of the fundraising booth in an accrual basis, focusing on revenues and expenses.
Revenues primarily consisted of sales and donations, amounting to a total of $3,380. Expenses encompassed equipment rental, utility connection fees, coffee-related expenses, baked goods, and supermarket purchases, tallying up to $1,105. Consequently, the booth generated a net income of $2,275 for July.
Balance Sheet (Accrual Basis) as of July 31st: The Balance Sheet serves as a snapshot of the booth’s financial position as of July 31st, reflecting the assets, liabilities, and equity.
Assets were composed of cash ($1,581), the remaining balance for Coffee, Coffee Cups, and Lids ($585), and Retained Earnings ($994.50). Notably, there were no liabilities.
The equity section combined the opening Retained Earnings with the net income generated during July. The total equity stood at $3,269.50. Consequently, the Balance Sheet attested to the booth’s financial health, with total assets mirroring total equity, signifying balance.
In the backdrop of York University’s dynamic summer events, this summer fundraising booth stands as an exemplary model of financial planning and execution. The Statement of Proof of Cash underscores the meticulous tracking of inflows and outflows, leading to an ending cash balance of $1,581 by the end of July. The Income Statement on an accrual basis paints a picture of the booth’s profitability, with a net income of $2,275 for the month. Lastly, the Balance Sheet showcases financial equilibrium, where total assets are equal to total equity, signifying a well-managed venture.
This financial overview not only highlights the success of the fundraising initiative but also underscores the student’s dedication to the mission of supporting Paws Support and their international endeavors. In a world where financial transparency and responsibility are paramount, this summer fundraising booth serves as a testament to the power of community engagement and entrepreneurship in making a positive impact
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