Footnotes to the 2007 annual report of Barnes \& Noble disclose the following:

The Barnes \& Noble Member program entitles the Member to receive a \(10 \%\) discount on all purchases made ( \(20 \%\) discount for adult hardcover books) during the twelve-month period. The annual fee of \(\$ 25.00\) is nonrefundable after the first 30 days. Revenue is being recognized over the twelve-month period based upon historical spending patterns for Barnes \& Noble Members. Refunds of fees due to cancellations within the first 30 days are minimal.

a. Explain in layman terms how Barnes \& Noble accounts for the cash received for its membership program. When does Barnes \& Noble record revenue from this program?

b. How does Barnes \& Noble's balance sheet reflect those membership fees?

c. Does the \(10 \%\) discount affect Barnes \& Noble's income statement when memberships fees are received?