Cosmos Fitness is a health club that offers members various gym services. Required: 1. Assume Cosmos offers a deal whereby enrolling in a new membership for $1,200 provides a year of unlimited access to facilities and also entitles the member to receive a voucher redeemable for 30% off yoga classes for one year. The yoga classes are offered to gym members as well as to the general public. A new membership normally sells for $1,235, and a one-year enrollment in yoga classes sells for an additional $650. Cosmos estimates that approximately 50% of the vouchers will be redeemed. Cosmos offers a 10% discount on all one-year enrollments in classes as part of its normal promotion strategy. a. & b. Indicate below whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price. c. Prepare the journal entry to recognize revenue for the sale of a new membership. 2. Assume Cosmos offers a "Fit 50" coupon book with 50 prepaid visits over the next year. Cosmos has learned that Fit 50 purchasers make an average of 40 visits before the coupon book expires. A customer purchases a Fit 50 book by paying $650 in advance, and for any additional visits over 50 during the year after the book is purchased, the customer can pay a $15 visitation fee per visit. Cosmos typically charges $15 to nonmembers who use the facilities for a single day. a. & b. Indicate below whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price. c. Prepare the journal entry to recognize revenue for the sale of a new Fit 50 book. Complete this question by entering your answers in the tabs below. Req 1A and 1B Req 1C Req 2A and 2B Req 2C Indicate below whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price. Item Description Performance Obligations? Stand Alone Prices $ 113 Yoga discount voucher Gym membership Total stand alone price Yes Yes Percentage of Total Stand Alone Prices 100% 0% 100% $ 113 Cosmos Fitness is a health club that offers members various gym services. Required: 1. Assume Cosmos offers a deal whereby enrolling in a new membership for $1,200 provides a year of unlimited access to facilities and also entitles the member to receive a voucher redeemable for 30% off yoga classes for one year. The yoga classes are offered to gym members as well as to the general public. A new membership normally sells for $1,235, and a one-year enrollment in yoga classes sells for an additional $650. Cosmos estimates that approximately 50% of the vouchers will be redeemed. Cosmos offers a 10% discount on all one-year enrollments in classes as part of its normal promotion strategy. a. & b. Indicate below whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price. c. Prepare the journal entry to recognize revenue for the sale of a new membership. 2. Assume Cosmos offers a "Fit 50" coupon book with 50 prepaid visits over the next year. Cosmos has learned that Fit 50 purchasers make an average of 40 visits before the coupon book expires. A customer purchases a Fit 50 book by paying $650 in advance, and for any additional visits over 50 during the year after the book is purchased, the customer can pay a $15 visitation fee per visit. Cosmos typically charges $15 to nonmembers who use the facilities for a single day. a. & b. Indicate below whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price. c. Prepare the journal entry to recognize revenue for the sale of a new Fit 50 book. Complete this question by entering your answers in the tabs below. Req 1A and 1B Req 1C Req 2A and 2B Req 2C Indicate below whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price. Item Description Performance Obligations? Stand Alone Prices $ 113 Yoga discount voucher Gym membership Total stand alone price Yes Yes Percentage of Total Stand Alone Prices 100% 0% 100% $ 113
