Cornwall Mobile Detailing (CMD) is a service that washes and details a customer's vehicle at their home or office. It operates on amembership basis. Members pay $200 dues per month, which entitle them to a complete wash and detail service monthly. Membersmay also order additional car washes during the month at a fee of $75. Additional washes are common in both summer and wintermonths. The number of members also varies with the season. The number of members and the average number of additional washesby members for the months of interest follow:JanuaryFebruaryMarchAprilMayJuneMembers3604209801,1201,1501,300MarchApriMayJuneAdditionalWashes (Averageper Member).Cornwall allows members to pay for dues on credit. Cornwall's experience is that 40 percent of its members pay cash for the dues, 50percent of the members pay the dues for a month in the next month, 5 percent in the second month after. The remainder isuncollectible. Additional washes are payable in cash.0.81.10.70.60.91.4Required:What are Cornwall Mobile Detailing's expected cash receipts for March, April, May, and June?Cash Receipts

In the below solution the following steps are followed 1. Calculation of Amount expected to be…

Answered: Required: What are Cornwall Mobile…

Business

Accounting

Required: What are Cornwall Mobile Detailing's expected cash receipts for March, April, May, and June?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Cash Book

So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial transactions in the firm. Cash is something that is universally accepted as a mode of payment. So, now comes to the topic i.e., cash book.

Question

Cornwall Mobile Detailing (CMD) is a service that washes and details a customer's vehicle at their home or office. It operates on a
membership basis. Members pay $200 dues per month, which entitle them to a complete wash and detail service monthly. Members
may also order additional car washes during the month at a fee of $75. Additional washes are common in both summer and winter
months. The number of members also varies with the season. The number of members and the average number of additional washes
by members for the months of interest follow:
January
February
March
April
May
June
Members
360
420
980
1,120
1,150
1,300
March
Apri
May
June
Additional
Washes (Average
per Member).
Cornwall allows members to pay for dues on credit. Cornwall's experience is that 40 percent of its members pay cash for the dues, 50
percent of the members pay the dues for a month in the next month, 5 percent in the second month after. The remainder is
uncollectible. Additional washes are payable in cash.
0.8
1.1
0.7
0.6
0.9
1.4
Required:
What are Cornwall Mobile Detailing's expected cash receipts for March, April, May, and June?
Cash Receipts

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Step 2 Calculation of Amount expected to be received in different months

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Step 3 Calculation of Cash expected to be received from additional washes

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