$5$

Exercise $13-43($Algo$)$ Prepare Budgeted Financial Statements $($LO $13-6)$

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 $$1,200$ dues per month, which entitle them to a complete wash and detail service monthly. Members

$16\mathrm{.}66$ points

$\backslash$table$[[,,\backslash$table$[[$Additional$],[$Washes $($Average$]]],[$January$,$Members,$460],[$per Member$),,]]$

Cornwall allows members to pay for dues on credit. Comwall'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.

Cornwall estimates that the number of members in July should increase $20$ percent above June levels, and the number of additional washes per member should increase by an estimated $12\mathrm{.}5$ percent. The following information is available for costs incurred in June. All costs except depreciation are pald in cash.

$\backslash$table$[[$Service costs,$],[$Variable costs,$ $49,000],[$Equipment maintenance,$45,000],[$Depreciation $($fixed$),85,000],[$Total$,$$ $179,000],[$Marketing and administrative costs Marketing $($variable$),$$ $37,006],[$Administrative $($fixed$),110,000],[$Total$,,$$ $147,000],[$Total costs,$ $326,000]]$

Variable service and marketing costs change with volume, measured by number of members. Fixed depreciation will remain the same, but fixed administrative costs will increase by $10$ percent beginning July $1.$ Equipment maintenance is outsourced and the contract calls for a $5$ percent increase beginning July $1.$

Required:

Prepare a budgeted income statement for July.

Note: Do not round intermediate calculations. Enter your answers rounded to the nearest whole dollars.

$\backslash$table$[[\backslash$table$[[$Cornwall Mobile Detailing$],[$Budgeted Income Statement$],[$For the Month of July$]],],[$Senvice costs:,$],[,],[,],[,],[,],[$Total service costs,$