EHIEIT I - DISCUSSION WITH CALVIN PUWER Memberships require a non-refundable $50G initiation fee, followed by a monthly fee of $50. The monthly fee must be paid at the beginning of each month. The following is a monthly breakdown of the new memberships. \"mmmm BMW SFC offered new members an initial fee return guarantee during the months of July, August, and September. The program was well received, and resulted in signicant increases in membership. Calvin believes the program is so successful because it provides people with a risk-free opportunity to see what SFC has to offer. Calvin is condent that once a member has a chance to work out at the gym, and take advantage of all it has to offer, no one will discontinue their membership. As of December 31, not a single person has taken advantage of the initial fee return guarantee. Revenue has been recorded on a cash basis by Calvin. The Power Points can be redeemed as follows: I- A total of 10 Power Points can be redeemed for a free pass for a guest. 1mm a free pass, a mem ber can bring a guest into the gym to use all of the facilities forfree. The only condition is that a free- pass guest cannot partake in any aerobic classes if they are full [i.e., They cannot bump out a payir'g customer]- Anyone can purchase a day pass to SFC for $5, which will entTtIe them to full access to the gym, including all classes. - A total of 15 Power Points can be redeemed for a free protein shake. 'lhe shake can be purchased from SFC for $6-5. It costs SFC a total of $2.50, including all overhead allocations, to prepare the shake. During the year, a total of 30,255 Power Points were issued. Members took favourabty to this pro motion; the Points were redeemed for 150 free guest passes and ?5 free protein shakes. Industry standards suggest that a total of Zti of all Points will not be redeemed. The only journal entries recorded in regards to the Power Points was a debit to cost of goods sold and credit to inventory for the protein shakes. Every time a member swipes their membership card to access the gym, they are elecb'onically entered into a random draw. The winner of the draw will then have a chance to win a free membership for life- In order to win the challenge, the member must do more push-ups than Calvin. The draw will take place on February 5 of the following scal year, and the push-up challenge will take place on February 25