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: Additional Washes (Average Members per Member) January 360 0.8 February 420 1.1 March 980 0.7 April 1,120 0.6 May 1,150 0.9 June 1,300 1.4 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. Required: What are Cornwall Mobile Detailing's expected cash receipts for March, April, May, and June? Cash Receipts March April May June

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: Additional Washes (Average Members per Member) January 360 0.8 February 420 1.1 March 980 0.7 April 1,120 0.6 May 1,150 0.9 June 1,300 1.4 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. Required: What are Cornwall Mobile Detailing's expected cash receipts for March, April, May, and June? Cash Receipts March April May June

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 18E: On December 1, 2019, AwakcAllNight Inc. sells 5,000 super caffeinated candy bars to Campus Grocers....

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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 $2,200 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 $175. 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: Members Additional Washes (Average per Member) January 560 2.8 February 620 3.1 March 1,180 2.7 April 1,320 2.6 May 1,350 2.9 June 1,500 3.4 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…
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 $900 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 $110. 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: Additional Washes (Average January February March April May June Members 430 per Member) 1.5 490 1.8 1,050 1.4 1,190 1.3 1,220 1,370 1.6 2.1 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…
Locker Rentals Corp. (LRC) operates locker rental services at several locations throughout thecity including the airport, bus depot, shopping malls, and athletics facilities. Unlike some of theold mechanical lockers that charge a fixed amount per use, LRC’s lockers operate electronicallyand are able to charge based on hours of use. The locker system transmits a daily message toLRC’s office indicating the number of hours that lockers have been used, which the office manager uses to determine when cash should be picked up at each location. LRC’s cash receipts system is described below.a. Two employees (“cash collection clerks”) are responsible for collecting cash from the lockers. Based on instructions from the office manager, one clerk collects cash from specificlocations on the west side of the city and the other collects from specific locations on theeast side.b. When each cash collection clerk returns with the cash, a supervisor counts the cash and prepares a cash count sheet.c. The…
eLean is an online fitness community, offering access to workout routines, nutrition advice, and eLean coaches.Customers pay a $50 fee to become registered on the website, and then pay $5 per month for access to all eLeanservices. How many performance obligations exist in the implied contract when a customer registers for theservices?
Lambie Custodial Services (LCS) offers residential and commercial janitorial services. Clients are billed monthly but can cancel the service at the end of any month. In addition to the employees who do the actual cleaning, the firm employs two managers who handle the administrative tasks (human resources, accounting, and so on) and one dispatcher, who assigns the cleaning employees to jobs on a daily basis. On average, residential clients pay $600 per month for weekly cleaning services and the commercial clients pay $2,600 per month for daily service (weekdays only). A typical residential client requires 15 hours a month for cleaning and a typical commercial client requires 69 hours a month. In September, LCS had 75 commercial clients and 80 residential clients. Cleaners are paid $20 per hour and are only paid for the hours actually worked. Supplies and other variable costs are estimated to cost $10 per hour of cleaning. Other monthly costs (all fixed) are $29,000 selling, general, and…
Freesure Company manufactures and sells commercial refrigerators. It is currently running a promotion in which it pays a $500 rebate to any customer that purchases a refrigeration unit from one of its participating dealers. The rebate must be returned within 90 days of purchase. Given its historical experience and the ease of obtaining a rebate, Freesure expects all qualifying customers to receive the rebate. Required: Prepare the journal entry to record the sale of a refrigerator to a participating dealer for $6,000.
Barry Bird opened the Barry Bird Basketball Camp for children ages 10 through 18. Campers typically register for one week in June or July, arriving on Sunday and returning home the following Saturday. College players serve as cabin counselors and assist the local college and high school coaches who run the practice sessions. The registration fee includes a room, meals at a nearby restaurant, and basketball instruction. In the off-season, the facilities are used for weekend retreats and coaching clinics. The following transactions took place during the month of June: June 1 Bird invested cash in the business, $10,000. 1 Purchased basketballs and other athletic equipment, $3,000. 2 Paid Hite Advertising for flyers that had been mailed to prospective campers, $5,000. 2 Collected registration fees, $15,000. 2 Rogers Construction completed work on a new basketball court that cost $12,000. Arrangements were made to pay the bill in July. 5 Purchased office supplies on account…
Jolly Cleaners offers residential and commercial cleaning services. Clients pay a fixed monthly fee for the service, but can cancel the service at the end of any month. In addition to the employees who do the actual cleaning, the firm includes two managers who handle the administrative tasks (human resources, accounting, and so on) and one dispatcher, who assigns the cleaning employees to jobs on a daily basis. On average, residential clients pay $320 per month for cleaning services and the commercial clients pay $1,800 per month. A typical residential client requires 10 hours a month for cleaning and a typical commercial client requires 40 hours a month. In March, Jolly Cleaners had 30 commercial clients and 160 residential clients. Cleaners are paid $15 per hour and are only paid for the hours actually worked. Supplies and other variable costs are estimated to cost $5 per hour of cleaning. Other monthly costs (all fixed) are $49,000 SG&A, including managerial and dispatcher…
Ivanhoe Magazine Ltd. is a small company run by two enterprising university students. They publish an issue of the magazine once a month from September through April. The magazine reports on various university activities and provides information such as how to get the best concert tickets, where to get the best pizza for the best price, where the good study spots are, and how to get library staff to help with research. The magazine is sold either on a prepaid subscription basis for $12 for all eight issues, or for $2 per issue. During September, 1,650 subscriptions were sold. Up to the end of December, a total of 10,725 single copies were sold. The company also pre-sells advertising space in the magazine to local businesses that focus on the student market. During July and August, the company signed up several businesses and collected $16,500 in advertising revenues. The advertisements are to be included in all eight issues of the magazine. The cost of printing and distributing the…
A Club runs a library for its members, As part of club policy, an annual subsidy of upto $5 per member including cost of books may be given from the general funds of the club. The management of the club has provided the following figures for its library department. Number of Club members Number of Library members Library fee per member per month Fine for late return of books Average no. of books returned late per month Average no. of days each book is returned late Number of available old books 5,000 1,000 $ 100 $1 per book per day 500 5 days 50,000 books Cost of new books $ 300 per book 1,200 books Number of books purchased per year Cost of maintenance per old book per year Staff details $10 No. Per Employee Salary per month ($) 10,000 7,000 4,000 You are required to calculate: Librarian Assistant Librarian Clerk 01 03 01 (i) the cost of maintaining the library per year excluding the cost of new books; (ii) the cost incurred per member per month on the library excluding cost of new…
Paul’s Pool Service provides pool cleaning, chemical application, and pool repairs for residential customers. Clients are billed weekly for services provided and usually pay 80 percent of their fees in the month the service is provided. In the month following service, Paul collects 15 percent of service fees. The final 5 percent is collected in the second month following service. Paul purchases his supplies on credit, and pays 50 percent in the month of purchase and the remaining 50 percent in the month following purchase. Of the supplies Paul purchases, 70 percent is used in the month of purchase, and the remainder is used in the month following purchase. The following information is available for the months of June, July, and August, which are Paul’s busiest months: June 1 cash balance $16,900. June 1 supplies on hand $4,700. June 1 accounts receivable $9,700. June 1 accounts payable $4,600. Estimated sales for June, July, and August are $29,100, $43,700, and $46,900,…
On December 1, 2019, AwakcAllNight Inc. sells 5,000 super caffeinated candy bars to Campus Grocers. The candy bars sell for 3 per bar. In addition, AwakcAllNight pays Campus Grocers a 900placement fee to ensure that its candy bars are always stocked prominently by the cash register. The 900 is paid at the end of each month based on the results of random inspections of Campus Grocers by AwakcAllNight to ensure that the terms of the contract are being followed. Required: 1. Determine the transaction price for Awake AllNights revenue contract. 2. Prepare AwakeAllNights journal entries to recognize sales revenue and pay Campus Grocers the placement fee.