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Fit & Slim ( F&S ) is a health club that offers members various gym services. Required: Assume F&S offers a deal whereby enrolling in
Fit & Slim F&S is a health club that offers members various gym services.
Required:
Assume F&S offers a deal whereby enrolling in a new membership for $ provides a year of unlimited access to facilities and also entitles the member to receive a voucher redeemable for 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 $ and a oneyear enrollment in yoga classes sells for an additional $ F&S estimates that approximately of the vouchers will be redeemed. F&S offers a discount on all oneyear 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.
Assume F&S offers a Fit coupon book with prepaid visits over the next year. F&S has learned that Fit purchasers make an average of visits before the coupon book expires. A customer purchases a Fit book by paying $ in advance, and for any additional visits over during the year after the book is purchased, the customer can pay a $ visitation fee per visit. F&S typically charges $ 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 book.
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