Trenholm School has been approached by its parents

association with #102

Trenholm School has been approached by its parents' association with a proposal for the
coming school year. As the school is committed to accepting students with varying financial
ability, parents have begun to notice that many students cannot afford the cost of the school
uniform. The association is proposing starting a "gently used" uniform store. The parents are
proposing to take over a supply closet on the third floor of the school and having it staffed by
volunteers. The plan is to ask graduating students to donate their uniforms to the school. These
uniforms would then be sold to parents at a significantly discounted price. The association
would have minimal costs associated with the project.They would have to do some renovation
to the supply closet to make it look like a store. They would have to employ a seamstress to
mend some of the uniforms and they would need some advertising. They have also indicated
that any funds that they make should be used to provide financial aid to students.The
bookkeeper for Trenholm School has approached you, the auditor for the school, for some
guidance as to how she should account for this new venture. Specifically she is unsure whether
to set up a separate fund for the store and how to report the uniforms that are being donated.
Trenholm School uses the restricted fund method of accounting.RequiredRespond to the
bookkeeper's request.View Solution:
Trenholm School has been approached by its parents association with

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