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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 $1,500 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 $300 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 $150 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 $375 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 $225 per month. For the month of May add $150 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 $450 and signage for the booth for $150 that is immediately expensed, paid for both with your MasterCard whose balance will be due on July 2nd. A total of $1,125 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 75 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 225 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 $75 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 $3,000, there was a donation jar that had $900 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 $2,100 for cash, $675 for Coffee, coffee cups and lids and $1,147.50 for retained earnings. The opening balance of Beverages Inventory is zero. Required: 1. Prepare the statement of proof of cash by July 31st. 2. Prepare the Income Statement (accrual basis) for the Month of July. 3. Prepare the Balance Sheet (accrual basis) as of July 31st. 1. Opening Balance of Cash Cash received: Paws Support Cash Advance Revenue Donations 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 2. Revenue Donations 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 Net Income 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 Beverages Payable Coffee, coffee cups and lids payable Paws Support Cash Advance Total Liabilities Retained earnings Total Liability plus Equity

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