Reference no: EM131460353

You are planning to open a small shelter for homeless men in the basement of your church. The governing board has promised you the funds needed to start up the shelter if you can negotiate a reimbursement rate from the city that covers your operating expenses. You expect that you will be able to house 9 men each night, and the city assures you that there will be no shortage of homeless men at any time during the year. You will have to pay one full-time staff person $37,000 a year, and hire a second part-time staffer for $15,000 a year. You will have laundry and food costs of $35 per man per week, and the church will have to pay an additional $2,600 a year in insurance to cover the activities of the shelter. The City will pay you $180 per homeless man per week, and payments will come 2 months after service has been provided. All salaries and food costs are paid when service is provided. The shelter will not have to pay its share of the insurance costs until the last month of the year. (Remember that 9 a night, means that only 9 will be there for a week.) Develop an annual operating budget using accrual accounting for the shelter in order to show its expected profit or loss. [NOTE: Assume that there are 52 weeks in a year]