The local minor league baseball team The Hampton

Hounds began
The local minor league baseball team, The Hampton Hounds, began their season in late April,
with five home dates (and no road games) in April. The team’s owner is seeking a short-term
loan from the local bank to help fund some improvements. As a result, a statement of cash
receipts and disbursements was prepared for the bank for April. The owner estimates that the
average cash receipts from tickets and concessions is $20,000 per home date. The average
operating cash disbursements is $4,000 per home date. Players are paid the 15th of every
month during the regular season (until September 15) at an average rate of $16,000 per month
per player. All 25 players receive their first paycheck on May 15. Rent is paid on the stadium on
the first of every month during the playing season at a rate of $60,000 per month, with the first
payment due on May 1 and the last payment due on September 1. In addition to individual
game sales, the Hounds sold 1,000 season tickets during the month of April at $720 per ticket.
There are 160 total games in the season, half of which are home dates.1. Prepare a statement
of cash receipts and disbursements for April.2. Prepare an accrual basis income statement for
April. 3. Which statement best represents the results of operations for April?4. Comment on
management’s intention to use the statement of cash receipts and disbursements to support
the request for the bank loan rather than using an accrual-based income statement.View
Solution:
The local minor league baseball team The Hampton Hounds began
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